Securities and Investment Blog

Representing Elders And Athletes
It wouldn’t seem likely that elders and athletes would have much, if anything, in common.  But they do.  They are frequently blessed with substantial semi-liquid assets, and are therefore the targets of fraudulent or reckless investment schemes. Much has been written about why professional athletes are frequent victims.  And the last professional athlete I represented possessed many of the following common attributes:·         Young and inexperienced with finances;·         Rapidly accumulating substantial wealth;·        ...

Kokesh V. Sec: Implications For The Statute Of Limitations For Missouri Securities Enforcement Actions
 Kokesh v. SEC, Docket No. 16-529 (oral argument date April 18, 2017) – Implications for the Statute of Limitations for Missouri State Securities Enforcement Actions. By John R. Phillips, Counsel for Cosgrove Law Group, LLC and former Director of Enforcement for the Missouri Securities Division, Office of the Secretary of State.  Kokesh v. SEC is an appeal to the U.S. Supreme Court from the 10thCircuit Court of Appeals, in which the Court will be asked to decide whether a disgorgement award in favor of the SEC constitutes a penalty or forfeiture within the meaning of 28 U.S.C. § 2462, which therefore must be brought...

Get Your Own Lawyer, Darn It!
Financial advisors facing an arbitration claim or regulatory inquiry often count on their broker-dealer or registered investment advisor for legal counsel. These “employers” will frequently provide them with an ostensibly independent “conflict counsel” after they retain their own counsel. Unfortunately, however, it is arguably little more than a charade when the “independent” attorney either has, or one day hopes to represent the broker-dealer or registered investment advisor. Consider viewing the situation in the context of an attorney's ethical duty of loyalty, her fiduciary duty to put the client's interests...

In Re Behrends: Finra Arbitration Awards May Not Be Dischargeable In Bankruptcy But Make Sure To Register Them As Judgments.
11 U.S.C. §523(a)(19), which was part of the Sarbanes-Oxley Act of 2002, states that a discharge [in bankruptcy] does not discharge an individual debtor from any debt that                        (A) is for:(i) the violation of any of the Federal securities laws…, any of the State securities laws, or any regulation or order issued under such Federal or State securities laws; or (ii) common law fraud, deceit, or manipulation in connection with the purchase or sale of any security; and            ...

Sentinel Growth Fund Management And Mark Varacchi: Even Rich People Should Stick With Registered Financial Advisors.
On Thursday, February 2, 2017, the SEC filed a civil complaint in Connecticut federal court against Mark J. Varacchi and Sentinel Growth Fund Management, alleging that the defendants misappropriated at least $3.95 million of investor assets at two private funds the defendants advised/managed.  https://www. sec. gov/litigation/complaints/2017/comp-pr2017-40. pdf.  According to the complaint, the defendants used investor money for personal and business expenses, and to pay prior investors, which would be a Ponzi scheme.  This violated defendants’ fiduciary duty to their clients. Sentinel’s purported business model...