Traders in China and Hong Kong Paying $920,000 to Settle Insider Trading Case

The SEC has settled insider trading cases with two traders in China and Hong Kong, who agreed to pay more than $920,000 to settle the charges against them.

Cousins and business associates Zhichen Zhou and Yannan Liu, whose assets were frozen by an emergency court order when the SEC’s complaint was filed against them last month, must disgorge their entire ill-gotten profits of $306,929.59 plus pay penalties of $306,929.59 each. The court approved the settlement today.

The SEC’s complaint alleged that Zhou and Liu traded two health care company stocks (MedAssets Inc. and Chindex International) based on nonpublic information about their impending acquisitions by private equity firms. Liu was a private equity associate at TPG Capital, which had ties to both of the deals, and maintains a personal relationship with at least one current TPG Capital employee.
“Insider trading is more damaging than it is profitable, as experienced by these traders.  First they had their assets frozen by a court order, and now they must pay three times the amount of their insider trading profit to settle the case,” said Julie K. Lutz, Director of the SEC’s Denver Regional Office.
Zhou and Liu, who reside in Beijing and Hong Kong respectively, settled the charges without admitting or denying the allegations.  They consented to the final judgment permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

SEC Press Release

SEC Issues Annual Staff Reports on Credit Rating Agencies

The Securities and Exchange Commission today issued its two annual staff reports on credit rating agencies registered as nationally recognized statistical rating organizations (NRSROs).  The reports show that NRSROs have made operational improvements and have enhanced process accountability, controls and governance, and that smaller NRSROs have made competitive inroads in certain rating categories.

“These reports demonstrate the SEC’s vigilant oversight of the credit rating industry,” said Chair Mary Jo White.  “The staff’s continued efforts are yielding valuable results as we are seeing improvements in the overall compliance cultures at many of the credit rating agencies."

The annual examination report summarizes the staff’s findings from the examinations of each NRSRO as required by the 2010 Dodd-Frank Act.  SEC examiners performed risk assessments on specific areas in addition to examining the eight required review areas.  The report shows that all of the NRSROs have enhanced their understanding of their obligations as regulated entities and that at many of the firms, operational improvements made in prior years are being further integrated and enhanced.

SEC Press Release

SEC Appeals Process on the Slow Track - WSJ

More problems surfacing for the SEC's in-house legal system, where the SEC gets to be prosecutor, judge, jury and appellate court and industry participants get screwed.

According to the Wall Street Journal, "[s]ince Mary Jo White became SEC chairman in April 2013, the median time for the agency to decide appeals of its in-house judges’ decisions has increased to 19 months."

That is almost double the median times under her two main predecessors, Christopher Cox and Mary Schapiro.

Critics—including former SEC officials, business groups and defense lawyers—said the SEC’s approach means defendants often lose both ways. The trial portion of the civil case moves much more quickly than such matters typically would in federal court, giving limited time to prepare for trial, and defendants then can wait years for the SEC to decide appeals.

This is an outrage. The SEC spends years investigating, taking depositions, serving subpoenaes and "investigating." When they decide to file a case, the Commission decides to file the case, approves the charges and the language of the complaint, appoints the prosecutors, and appoints the judge to hold a trial.

The Respondents cannot take any depositions, nor can they serve any subpoenas, the trial is conducted on an expedited basis, pursuant to rules written by the Commission which are heavily biased in favor of the Commission's prosecutors.

After the Commission appointed judge finds the Respondents guilty, the Respondents have to appeal to the Commission! Yes, you appeal to the very same panel who decided to bring charges against you, and they then take their time in deciding the appeal - for two years.

Shameful.

SEC Appeals Process on the Slow Track 

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• Former SEC ALJ Claims Bias 
• SEC's Use of Administrative Hearings Under Fire
• Judge Rakoff Questions the SEC's Overuse of Administrative Proceedings
• The Need for Narrow SEC Subpoenas
• How Do I Respond to a Wells Notice
• Tips for Responding to an SEC Subpoena

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Mark Astarita and the attorneys at Sallah Astarita & Cox represent investors and financial professionals in FINRA and SEC investigations and trials on a regular basis. If you have received an inquiry from any securities regulator, call Mark at 212-509-6544 for a free consultation before you do anything else.

SEC Seeks Public Comment on Transfer Agent Rules

The Securities and Exchange Commission today voted to issue an advanced notice of proposed rulemaking (ANPR) for new requirements for transfer agents, together with a concept release requesting public comment on the Commission’s broader review of transfer agent regulation.

The ANPR and concept release provide a summary of the history of the national clearance and settlement system, the role of transfer agents within that system, and the origins and current status of the Commission’s transfer agent rules.

The Commission also identifies in the ANPR certain areas in which it intends to propose specific rules or rule amendments, including registration and annual reporting requirements, safeguarding of funds and securities, antifraud requirements in connection with the issuance and transfer of restricted securities, and cybersecurity and information technology, among others.

The concept release seeks comment on a broader range of issues to help inform the Commission’s consideration of additional rulemaking.  These include the processing of book entry securities, bank and broker-dealer recordkeeping for beneficial owners, administration of issuer plans, outsourcing and the role of transfer agents to mutual funds and crowdfunding.

“Transfer agents increasingly play critical roles in the securities markets and our rules need to be updated and enhanced to ensure that investors and our markets are optimally served,” said SEC Chair Mary Jo White.  “The need for transfer agent reform has been recognized and supported by all of the Commissioners and today’s recommendations are a significant step forward. I want to thank all of the Commissioners for their input and specifically acknowledge Commissioner Luis Aguilar and former Commissioner Daniel Gallagher, who have been long-time champions of transfer agent reform.”

There will be a 60-day public comment period for both the ANPR and the concept release following publication in the Federal Register.

SEC Press Release

Morgan Stanley Settles Charges in “Parking” Scheme

The Securities and Exchange Commission today announced that Morgan Stanley Investment Management has agreed to pay $8.8 million to settle charges that one of its portfolio managers unlawfully conducted prearranged trading known as “parking” that favored certain advisory client accounts over others.

The portfolio manager and a brokerage firm trader who assisted the schemes agreed to be barred from the securities industry and pay penalties in the settlement.  The brokerage firm, SG Americas, agreed to pay more than $1 million to settle the SEC’s charges.

An SEC investigation found that while managing accounts that needed to liquidate certain positions, Sheila Huang arranged sales of mortgage-backed securities to SG Americas trader Yimin Ge at predetermined prices that would enable her to buy back the positions at a small markup into other accounts advised by Morgan Stanley.  Huang also sold additional bonds at above-market prices to avoid incurring losses in certain accounts, but she repurchased them at unfavorable prices in a fund that she managed without disclosing it to the disadvantaged fund client.

“Instead of playing by the rules, Huang engaged in prearranged trading schemes that benefited some clients while harming others,” said Marshall S. Sprung, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.  “Morgan Stanley failed to uncover Huang’s misconduct due to its lack of supervisory oversight and failure to implement policies specifically addressing prearranged trades.”

SEC Press Release

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RIA Buyers and Sellers Gearing Up for A Busy 2016

According to this article in On Wall Street, 2016 is going to be a big year for RIAs - not just for their revenue, but for buying and selling the firms themselves.

Buyers and sellers are gearing up for a busy year for deals as private equity buyers come off the sidelines, attracted by the strong-growth business and “strong” valuations.

“Buyers are still attracted to wealth management,” said Elizabeth Nesvold, managing partner at Silver Lane Advisors, a prominent New York investment banking firm, speaking at the MarketCounsel Summit.

“They see the average RIA growing at 15% plus in a minimally capital intensive business, and baby boomer demographics driving the need for financial and estate planning advice.”

 Liquidity, low interest rates and pent-up M&A demand are also driving the market, Nesvold said.

Read the entire article, and call us if you are interested in creating, buying or selling an RIA firm. We have been representing financial professionals for decades - 212-509-6544.

Grab Your Wallet: RIA Buyers And Sellers Gearing Up for Busy 2016 | IAG Breaking News:

SEC Charges Financial Advisor in Market Manipulation Case

The Securities and Exchange Commission today announced additional fraud charges in a market manipulation case the agency filed last week.

The SEC amended its complaint to additionally name Donald Toomer Jr., a Las Vegas-based financial advisor who allegedly agreed to buy shares of three microcap stocks in client accounts in exchange for hundreds of thousands of dollars in cash kickbacks.   

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against Toomer.

“We allege that Toomer abused his role as a financial advisor to help create the false appearance of market demand in these stocks and facilitate the pump-and-dump scheme,” said Andrew M. Calamari, Regional Director of the SEC’s New York office. 

The SEC’s amended complaint charges Toomer with violations of the antifraud provisions of the federal securities laws and seeks a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest and a penalty, and a penny stock bar.

The SEC’s continuing investigation is being conducted by Rhonda L. Jung, Teresa A. Rodriguez, Melissa Coppola, Nancy A. Brown, Adam S. Grace, and Wendy B. Tepperman of the New York office.  The SEC’s litigation is being led by Ms. Brown and the case is being supervised by Lara Shalov Mehraban.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of New Jersey, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority’s Office of Fraud Detection and Market Intelligence.

SEC Press Release

Credit Suisse Deal Gets Worse - 13 Year Repayment

This Credit Suisse - Wells Fargo deal is getting worse. Aside from a $5 million bonus cap, we are now learned that the forgiveness on the note is THIRTEEN YEARS!!

I assume everyone knows how these forgiveable loans work. The firm gives you a multiple of your last year's gross commissions as a loan, and they forgive the loan over a period of years. That period has been 7 to 9 years, firms are starting to ask for 11 years, and now Wells Fargo is looking for 13 years.

That is a long time, and something that brokers need to seriously consider before agreeing. We have all witnessed the problems with these long term notes - managers change, staff gets fired, offices close, desks close, divisions consolidate. There are dozens of things that could go wrong and make a broker's life a disaster in a 7 year relationship, never mind thirteen years.

As I said before, these agreements are negotiable, and need to be reviewed by counsel. Brokers cannot be expected to commit to a thirteen year relationship, which for many means spending the rest of their career with Wells Fargo.

That may not be a bad thing, but what happens when Wells Fargo decides to stop paying on accounts with less than $500,000 in assets? Or it decides to merge with Merrill Lynch? Or it shuts down the office that you work in and changes your commute to 2 hours, or...well, I could go on forever. I have represented brokers in all of these types of scenarios, and the longer the note, the more potential for problems.

Going to another firm is a possible solution, but then there is the arbitration that you will need to file to get your deferred compensation to consider. Odds are you will win that case, but it is a hassle.

Need help? Call our office at 212-509-6544. We represent brokers across the country in transitions, and have dealt with every major firm. Or email me - mja@sallahlaw.com

Related articles

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• Promissory Notes - EFL Litigation Explained
• Brokers Not Buying the Credit Suisse Wells Fargo Deal 
• More Credit Suisse Defections - Advisors With $1.4B go to J.P. Morgan 
• Merrill Using Robots, Not Brokers 
• Merrill Lowers Broker Compensation 

Fidelity Fined - Failed to Detect Imposter

The Financial Industry Regulatory Authority announced Friday it has fined the brokerage arm of Fidelity Investments for failing to detect an imposter broker who stole $1 million from clients.

http://www.fa-mag.com/news/finra-fines-fidelity-for-failing-to-detect-imposter-broker-24311.html

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SEC News - Disclosure Failures, Fraud, and False Statements

J.P. Morgan to Pay $267 Million for Disclosure Failures
Two J.P. Morgan wealth management subsidiaries have agreed to pay $267 million and admit wrongdoing to settle charges that they failed to disclose conflicts of interest to clients.

CEO of Pharmaceutical Company Charged with Fraud
The former CEO of pharmaceutical company Retrophin has been charged with committing fraud during a five-year period when he also was working as a hedge fund manager.

Hedge Fund Adviser Lied to Investors
A hedge fund adviser has been barred from the securities industry for making a series of false statements to investors and ultimately causing a fund’s collapse.

SEC Announces Fraud Charges Against Investment Adviser
Fraud charges have been announced against a Stamford, Conn.-based investment advisory firm accused of investing clients in certain bonds with a hidden financial benefit to a broker-dealer connected to the firm.


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.

SEC News - Bad Auditing, Unregistered Brokers, and Fraud

SEC Suspends Public Accountants for Bad Auditing
The SEC suspended five accountants and two audit firms from practicing or appearing before the SEC after they violated key rules that are designed to preserve the integrity of the financial reporting system.

Lawyers Offered EB-5 Investments as Unregistered Brokers
A series of enforcement actions have been announced against lawyers across the country charged with offering EB-5 investments while not registered to act as brokers.

Charges Announced for Spoofing and Order Mismarking
Fraud charges have been announced against three Chicago-based traders accused of circumventing market structure rules in a pair of options trading schemes.

Grant Thornton Ignored Red Flags in Audits
National audit firm Grant Thornton LLP and two of its partners agreed to settle charges that they ignored red flags and fraud risks while conducting deficient audits of two publicly traded companies that wound up facing SEC enforcement actions for improper accounting and other violations.

Bitcoin Mining Companies Charged
Two Bitcoin mining companies and their founder have been charged with conducting a Ponzi scheme that used the lure of quick riches from virtual currency to defraud investors.

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.

Brokers Can Win Promissory Note Cases

We all know that defending promissory note cases for brokers is difficult. After all, those notes have been written, revised, rehashed and reworked by brokerage firm attorneys for years.

As I have noted in the past, and in my near daily telephone consultations with brokers with promissory note issues, this does not mean that the broker has no defense to the note. More appropriately, the "defense" is the counterclaim. The fact is, brokers don't simply up and leave their firms, and they do not do it on a whim. Changing firms is difficult, time-consuming, and a burden on clients. There is a disruption in the practice, and countless hours spent getting setup at the new firm and moving the clients.

Brokers leave because something is wrong, and depending on what is wrong there may be a viable counterclaim which can offset all or part of the promissory note obligation. I have represented brokers who successfully prosecuted claims against their firms in a number of instances.

One recuring theme is a broker who is hired with a specific book of business, and the firm later decides that it no longer wants that business - those claims have been successful in small and large note cases - in one case where I represented the broker, an arbitration panel cancelled a $750,000 note because of the counterclaim. In another a panel ordered brokers to pay back half of a $1.6 million note. In another, the panel ordered a forgiveness of 2/3's of a million dollar note.

Another issue which has been the basis of a successful counterclaijm are the failing of the firm's business, which impacts the broker. If the broker can no longer conduct business, the argument is that the broker must leave, and the loan, which was part of the consideration in the hiring, should not be enforced. We have been somewhat successful with those types of claims.

We have also obtained reductions of note obligations because of bad acts by the firm, typically in connection with a broker's termination and the marking of a U5 with false information.

Just this week an arbitration panel offset a 2.9 million dollar note by awarding the broker 1.7 million dollars on his counterclaim, cutting the amount due on the note in half.  It was not a simple fight, and undoubtedly cost the broker time and money - there were multiple motions and briefs. The firm tried to split its claim, and the broker's counterclaim into two separate cases. The concept is that the firm will win its claim first, before the broker's counterclaim can be heard. The firm will then have an award, and if not paid in 30 days, FINRA will suspend the broker's license, forcing the broker to settle or dismiss his counterclaim.

This tactic has been attempted in some of my cases, but has never been successful. It was not successful here, and both claims were heard together, as they should be.

The arbitration had five different prehearing conferences, and the hearings themselves took 6 hearing days over 3 months. FINRA's forum fees were $21,000, of which the broker was ordered to pay $9,000. Then there are other costs, and attorneys fees.

The award does not address the details of the claims, but InvestmentNews reports that the broker had a successful practice at Smith Barney where he had been for 13 years, making loans to high net worth and private equity clients through Citigroup. After the Morgan Stanley takeover, his loans were moved to another part of the operation, costing him millions of dollars in revenue.

I see this far too often. While there is no doubt that a firm is entitled to drop business lines, or restructure, it also has the obligation to fairly treat its employees who are impacted by such business decisions. We saw the same disregard for the rights of the brokers in the Bank of America take over of Merrill Lynch, where business lines were changed, and merged and brokers lost millions of dollars in production - production that the firm took from the brokers by shifting the business to another business until. The firm keeps the production, the broker gets no credit for it, and the firm has destroyed the broker's business and keeps its profits.

Brokers should not simply assume there is nothing that can be done. A consultation with an experienced securities attorney is well worth the time. I conduct those consultations without charge and there is no harm in calling my office to see if we can help - 212-509-6544.

Broker claws back $1.2 million from Morgan Stanley in 'significant' promissory note case

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• Good Markets, More Broker Transitions 
• More Credit Suisse Defections - Advisors With $1.4B go to J.P. Morgan
• Those Deals Really Are Negotiable! - Adviser Attrition at Barclays
• Brokers Not Buying the Credit Suisse Wells Fargo Deal
• Reviewing Broker Transition Agreements

Merrill Lowers Broker Compensation

As firms are fighting to recruit brokers, and paying 3x trailing 12 to entice brokers to move, one would think the wirehouses would leave compensation levels alone.

Not so. According to On Wall Street, Merrill Lynch has announced that it is increasing its grid levels.

The changes might not make a significant difference but for producers below $1.5 million, the grid ranges will increase by $50,000. Reports are that more than half of Merrill brokers produce less than a million, so while the impact might be small, the number of brokers affected is significant.

UBS is recruiting like crazy. Maybe we will see an increase in compensation in response to Merrill's new move?

Merrill Raises the Bar on Broker Pay

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SEC Ready to Revise Accredited Investor Definition

The SEC was directed in Dodd-Frank to review and revisit the definition of an accredited investor. While it has been modified a bit (to remove the investor's home from the net worth calculation) the net worth and income figures have not been changed since 1982.

According to InvestmentNews, in an appearance before the House Financial Services Committee, SEC Chairman White said a staff study of the accredited investor standard would be released sometime in the next three to four months. The findings could provide the foundation for rulemaking.

SEC indicates timing, substance of 'accredited investor' reform

Cetera Fined For Failing to Apply REIT Discounts

Cetera Investment Services was censured; fined $30,000; ordered to pay $17,883.66, plus interest, in restitution to customers; and ordered to review all non-traded real estate investment trust (REIT) and business development company (BDC) sales it made during the relevant period and certify that it has identified all transactions for which a customer did not receive the applicable volume discount and provide restitution if necessary.

Typically, investors are entitled to discounted prices on purchases of certain nontraded REITs, typically when the sale is greater than $500,000.  according to various prospectuses of nontraded REITs.

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Mark Astarita is a New York securities lawyer who represents investors, brokers and firms in securities regulatory, enforcement and arbitration matters across the country. For a free consultation call Mark at 212-509-6544 or email him at mja@sallahlaw.com

New FINRA Rule on Termination Disclosure Does not Change U-5 Reporting Periods

When brokers leave a firm, the firm notifies FINRA by filing a Form U5. Most U-5 filings are not controversial, but ones where a broker is fired can sometimes cause problems. In fact, we are constantly representing brokers in U5 disclosure issues, either negotiating the language before filing, or arbitrating with firms over what has already been filed.

The impact of a U5 filing when the broker has been fired can be significant, and far too many brokers find themselves unemployable because of the language of the disclosure on the form. We actively encourage brokers to get a securities employment attorney involved the moment that they learn of the termination, in an effort to minimize the language and help in the transition to a new firm.

Firms have 30 days to file a Form U-5. Because of the importance of the termination disclosure, BrokerCheck does not report the termination information for 15 days from filing, in order to give the broker the opportunity to submit a comment that is also disclosed on BrokerCheck.

In November, the SEC approved FINRA's request to reduce that 15 day "hold" to three days, and FINRA believes that this is a sufficient amount of time for the broker to receive the U-5, review it, consult with an attorney and file a comment. More about that later, but that is the rule change.

FINRA claims that the timing is important to investors. This is simply not true. Investors do not use BrokerCheck. Securities attorneys use BrokerCheck, but the simple reality is that under either version of the rule, the fact that the broker was terminated is on BrokerCheck almost immediately after the U5 is filed. The termination details are held for 15, or now, 3 days.

Incredibly, the New York Times, and some attorneys who represent customers, have published comments believing that FINRA changed the 30 day period. The New York Times states "[s]tarting on Dec. 12, brokerage firms will have to report the details of a broker's termination in three business days, down from 12." As above, this simply is not true, and unfortunately, the NYT's error is being multiplied by folks claiming to be securities attorneys who are re-posting the Time's article, without reading the actual rule change.

The reality for brokers with termination issues, is not to panic. The rule did not change, the firm still has 30 days to file, and you have time to negotiate.

If you are in danger of being terminated, contact a knowledgeable securities attorney to discuss the termination, the U-5 disclosures and how to minimize the impact.

The NYT Deal Book article is here. The rule change was in FINRA Regulatory Notice 15-49, and you can view Form U5 at FINRA's site.


New Rules on Reporting Brokers’ Dismissals to Begin Dec. 12 - The New York Times:

Broker Promissory Note Litigation - EFT Litigation Attorney

Apex Clearing Fined For Violations of Regulation SHO

Apex Clearing was censured and fined $12,500. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that among other things, it had fail-to-deliver positions at a registered clearing agency in equity securities that resulted from long sales, and did not close the fail to deliver positions by purchasing or borrowing securities of like kind and quantity within the time frame prescribed by Rule 204(a)(1) of Regulation SHO. The findings stated that the firm had failed to deliver positions at a registered clearing agency in equity securities that resulted from sales of securities that the seller was deemed to own pursuant to §242.200 of Regulation SHO and intended to deliver once all restrictions on delivery had been removed, and did not close the fail-to-deliver positions by purchasing or borrowing securities of like kind and quantity within the time frame prescribed by Rule 204(a)(2) of Regulation SHO.

www.finra.org/sites/default/files/publication_file/November_2015_Disciplinary_Actions.pdf

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Mark Astarita is a New York securities lawyer who represents investors, brokers and firms in securities regulatory, enforcement and arbitration matters across the country. For a free consultation on markup questions, or any securities related question, call Mark at 212-509-6544 or email him at mja@sallahlaw.com

More Credit Suisse Defections - Advisors With $1.4B go to J.P. Morgan

We have been discussing this for weeks now - Credit Suisse and Wells Fargo made a mistake when they capped transition bonuses at 5 million dollars.

Now, maybe Wells Fargo entered the deal with Credit Suisse, knowing that it was not going to take any big producers, but that is doubtful. Producers with over a billion dollars under management are not going to accept a cap on the transition bonus of $5 million. JP Morgan and UBS know that, and are scooping up Credit Suisse brokers.

Today's latest defection, from IAG News

 "Two Credit Suisse teams managing over $1.4 billion in combined client assets passed on an offer to join Wells Fargo, choosing instead to move to J.P. Morgan, a spokeswoman acknowledged.

Credit Suisse and Wells Fargo struck a deal over a month ago, permitting the wirehouse to offer the Swiss firm's advisers up to 300% of their annual production to transition to Wells Fargo, according to people familiar with the matter. However, some advisers have been opting to join other the wirehouse competitors or more specifically, J.P Morgan Securities."

Some will argue that because of the way Credit Suisse structured the deal, brokers are giving up their deferred compensation. That might not be the case, depending on the details, but the simple fact is that these deals are negotiable, and firms will compensate brokers for the loss of deferred compensation.

The other question is why does Credit Suisse get to keep its employees' compensation when it decides to exit the business? Those deferred compensation dollars do not belong to Credit Suisse, it is compensation that is owed to the brokers, which was deferred based, at a minimum, that the firm was going to remain in business during the vesting period.

Brokers in transition, and brokers with deferred compensation issues should be contacting experienced securities attorneys to review their options. The attorneys at Sallah Astarita & Cox will provide a free consultation - call Mark Astarita at 212-509-6544 or email him at mja@sallahlaw.com


Advisors With $1.4B Leave Credit Suisse For J.P. Morgan 

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• Brokers Not Buying the Credit Suisse Wells Fargo Deal
• Transition Agreements are Negotiable - Even for Credit Suisse Brokers
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Firm and Brokers Fined for Municipal Securities Sales With Unreasonable Mark-ups

FINRA - Firm and representatives fined and ordered to pay restitution based on findings that they sold municipal securities for their own accounts to customers at aggregate prices (including any mark-ups) that were not fair and reasonable, taking into consideration all relevant factors, including the best judgment of the broker, dealer or municipal securities dealer as to the fair market value of the securities at the time of the transaction and of any securities exchanged or traded in connection with the transaction; the expense involved in effecting the transactions; the fact that the broker, dealer, or municipal securities dealer is entitled to a profit; and the total dollar amount of each transaction.

http://www.finra.org/sites/default/files/publication_file/November_2015_Disciplinary_Actions.pdf

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Mark Astarita is a New York securities lawyer who represents investors, brokers and firms in securities regulatory, enforcement and arbitration matters across the country. For a free consultation on markup questions, or any securities related question, call Mark at 212-509-6544 or email him at mja@sallahlaw.com