I just finished reading my weekly Investment News magazine, and as usual, I’m very disappointed. The magazine always provides a lot of good content about all kinds of topics relating to our industry; however they also show the underbelly or the dark side of our industry, as well. Here are some of the articles that I just read from my Investment News magazine.
Ameriprise to pay $1.17 million in arbitration ruling.
A FINRA arbitration panel ordered Ameriprise Financial Services Inc. to pay two elderly California investors $1.17 million for putting them in real estate investments that tanked.
The San Francisco panel ruled May 1 that Ameriprise had inappropriately advised two retired schoolteachers to sink $1.03 million into three risky tenant-in-common investments in office complexes and hotels in early 2008.
One of them failed, while the two others declined in value substantially, according to a statement by the investor’s attorney, who said that the couple had lost most of their life savings.
“We strongly disagree with the decision,” said John Brine, Ameriprise vice president for public relations.
UBS faces $5 Million claim on Puerto Rico bond funds.
A class action claim filed last week in federal court sheds new light on the possible conflicts of interest surrounding [financial services group] UBS’ sale of Puerto Rico municipal bond funds.
The complaint, filed last Monday in US District Court for the Southern District of New York on behalf of seven investors in Puerto Rico, is asking for damages “in excess of $5 million” on the grounds that UBS AG’s wealth management group violated its fiduciary duty by selling high-commission proprietary funds unsuitable for targeted investors.
UBS said the complaint is “wholly without merit,” according to a statement provided by spokesman Gregg Rosenberg.
SEC: Adviser broke custody rules, hid funds.
The Securities and Exchange Commission has charged a Midwest investment adviser with violating rules governing custody of client funds and consistently lying about client asset totals.
The SEC alleges that Professional Investment Management Inc. of Columbus, OH, overstated by $753,535 the amount of client assets in an approximately $7.7 million money market fund for each of the last three months of 2013. The agency also claims that the firm maintained control of client assets, but failed to arrange for independent verification of the funds.
“Wolf of Wall Street” expects to make $100 million.
Jordan Belfort, whose memoir “The Wolf of Wall Street” was turned into a film by Martin Scorsese, expects to earn more this year than he made as a stockbroker, allowing him to repay the victims of his financial fraud.
Belfort, a motivational speaker, will use his earning from a 45-city speaking tour in the US to repay about $50 million to investors. That was his share of the fine, he said.
Belfort spent 22 months in jail for money laundering and securities fraud in the 1990s after his brokerage firm, Stratton Oakmont Inc. defrauded investors out of more than $200 million. That story was retold last year in a blockbuster film starring Leonardo DiCaprio.
Well, I guess it’s nice to see Belfort is paying off his fine so investors can get back some of their money, but it still rubs me the wrong way to see a guy steal more than $200 million, spend less than two years in jail, then come out and make $100 million his first year out of jail!
I know the financial profession has its crooks, thieves, and “bad apples,” just like all other professions, but it would be nice to read my weekly magazine without being inundated with reminders on just how far we have yet to go.