Most brokers and advisers don’t guarantee your money back after a hack attack

The vast majority of brokerages and financial advisers don’t guarantee clients will be reimbursed for losses related to a cyber attack, a study by Wall Street’s federal regulator found — despite the fact that most said they “have been the subject of a cyber-related incident.” The Securities and Exchange Commission released details Tuesday from a study of cybersecurity practices at more than 100 broker-dealers and registered investment advisers. Just 15% of broker-dealers and 9% of advisers offer security guarantees to clients that would make them whole after cyber-related losses, the study found. At the same time, 88% of broker-dealers and 74% of advisers said they “have experienced cyber attacks directly or through one or more of their vendors.” More on MarketWatch [...]

BMO fights lawsuits seeking billions over customer's Ponzi scheme

Three and a half years after buying Marshall & Ilsley Corp., BMO Financial Group is fighting four federal lawsuits — one seeking a staggering $24 billion — stemming from M&I’s dealings with a profitable, but very corrupt, customer. The customer was a company owned by Tom Petters, a Minnesota man serving a50-year federal prison sentence in Leavenworth, Kan., for masterminding a $3.7 billion Ponzi scheme. That scam was thought to be the third-largest Ponzi in U.S. history. “Petters did not act alone,” charges the $24 billion suit filed by Florida investor groups that unwittingly financed some of Petters’ scam. More in the Journal-Sentinel [...]

Self-directed IRAs hold risks for financial advisers

The year-end tax savings crunch is here. Better make sure your clients don’t get snared in a self-directed IRA scam. The North American Securities Administrators Association on Monday warned investors about the fact and fiction behind the duties of third-party custodians who handle self-directed individual retirement accounts. Though the warning is targeted toward investors, advisers should also listen up. More in Investment News [...]

S.E.C. Is Examining Pimco Exchange Traded Fund

The Securities and Exchange Commission is looking into whether the money management firm Pimco inflated the returns of an actively traded $3.6 billion exchange traded fund that mirrors the bond giant’s flagship fund. The Pimco Total Return Exchange-Traded Fund is run by the money manger’s founder, William H. Gross, who has come under pressure this year as investors pull out money and as questions persist over his management style following the surprising departure of his heir apparent, Mohamed A. El-Erian, in January. More in the New York Times [...]

Judge Refuses To Cut New York Fund Manager’s 40-year Ponzi Sentence

A federal judge rejected Westgate Capital Management LLC founder James Nicholson’s request to shorten his 40-year prison term for running a $140 million Ponzi scheme at his hedge fund firm, likening it to the much larger fraud run by Bernard Madoff. U.S. District Judge Richard Sullivan in Manhattan on Monday turned aside Nicholson’s claims of ineffective assistance of counsel by his former lawyer, saying he would have imposed the same sentence even if other legal arguments had been made. More on Business Insider [...]

S.E.C. Makes Largest Ever Whistle-Blower Award

The identity is a mystery, but someone who provided important information to regulators in a securities fraud enforcement action is suddenly $30 million richer thanks to a federal whistle-blower law. The Securities and Exchange Commission announced on Monday that it had approved a payment of between $30 million and $35 million to an unnamed individual who lives in a foreign country, for providing information that helped federal authorities “detect an ongoing fraud.” The award is the largest ever given out by S.E.C. under the whistle-blower law, which was enacted as part of the financial regulatory overhaul known as Dodd-Frank. The first such payout, in August 2012, was for nearly $50,000. More in the New York Times [...]

ALERT: 2 New Co-sponsors Sign on to H.R.3482 – Restoring Main Street Investor Protection and Confidence Act

Congressman Mario Diaz-Balart [R-FL25] and Congressman Tom Cotton [R-AR4] have signed on to co-sponsor H.R.3482, bringing the number of co-sponsors to 55!
Click here for a current list of co-sponsors. If your Representative is not yet a co-sponsor, please urgently call and write your representative to get them to sign on. Letters can be submitted on-line at, where you can also find a Congressional directory for phone contact information.

BlackRock calls for U.S. stock market reforms

BlackRock Inc, the world’s largest asset manager, has asked regulators to force exchanges to lower their access fees and require greater transparency of broker dealer-run trading venues known as “dark pools.” The New York-based company outlined a set of proposals aimed at boosting public confidence in the equity markets in a letter on its website to the U.S. Securities and Exchange Commission dated Sept. 12. It said that while the market is “not broken or in need of large scale change,” improving current rules would help promote fairness, order and efficiency. More on Reuters [...]

ALERT: New York State Residents

NOW is the time to write Senator Schumer, thank him for his leadership and encourage him to engage his fellow Senators to join him in supporting S.1725, Restoring Main Street Investor Protection and Confidence Act. Submit your letter by clicking here. [...]


H.R.3482 – Two New Co-sponsors
Congresswoman Kay Granger [R-TX12] and Congressman Tom Marino [R-PA10] have signed on to Co-sponsor H.R.3482 – Restoring Main Street Investor Protection and Confidence [...]