Category Archives: Securities Law

Ameriprise Financial Censured & Fined $4.5 Million

SEC Charges Ameriprise Financial with Failure to Safeguard Client Assets According to a press announcement today, Ameriprise Financial Services Inc. will pay $4.5 million to settle SEC charges that it failed to safeguard retail investor assets from theft by its representatives. According to the SEC’s order, five Ameriprise representatives committed numerous fraudulent acts, including forging client documents, and stole more than $1 million in retail client funds between 2011 and 2014. The SEC found that the firm failed to adopt and implement policies and procedures reasonably designed to safeguard investor assets against misappropriation by its representatives. According to the SEC, the five representatives were based in Minnesota, Ohio, and Virginia, and three previously pled guilty to criminal charges. Ameriprise reportedly fired each of the advisors for misappropriating client funds and has implemented a new system to safeguard clients’ money. According to the….. To continue reading this legal news please click Read full information...

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SEC Charges Dragon-Click Corp, Officers In Alleged Offering Fraud

Public records published by the Securities and Exchange Commission (SEC) on June 11, 2018 indicate that the SEC has obtained a court order to halt an alleged ongoing fraud that involves stock in a company that “claimed to be developing a revolutionary internet shopping application and raised more than $2.4 million from at least 26 investors nationwide.” Fitapelli Kurta is interested in hearing from investors who have complaints regarding investments in Dragon-Click Corporation. According to the SEC, it has charged Dragon-Click Corporation; the company’s president, Isaac Grossman; Mr. Grossman’s wife, Adriana Grossman; and Ms. Grossman’s unregistered investment adviser, Dragon Management LLC, in connection with an “ongoing fraudulent offering of Dragon-Click stock and membership interests in Dragon Partners, LLC.” The SEC alleges that Dragon-Click and Mr. Grossman solicited investments in Dragon-Click stock from 2014 until 2018, and that….. To continue reading this legal news please click Read full information...

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SEC Charges Bhushan Dandawate Amidst Quadrant 4 System Corp Fraud Allegations

Publicly available records published by the Securities and Exchange Commission (SEC) on July 19, 2018 indicate that the SEC has charged Bhushan Dandawate with aiding and abetting a fraud committed by three entities—Quadrant 4 System Corporation, Nandu Thondavadi, and Dhru Desai—by “falsely claiming in bank documents that he controlled ten entities that were, in reality, controlled by QFOR, Thondavadi, and Desai, and by allowing QFOR to use those bank accounts for various fraudulent purposes.” The SEC’s complaint alleges additionally that Mr. Dandawate “participated in the falsification of” Quadrant 4 System’s revenue when he assisted in the arrangement of multiple round-trip transactions and “knowingly” signed and sent false audit confirmation letters to the company’s auditors—conduct that led to the “material falsification” of the company’s financial conditions reported in public filings….. To continue reading this legal news please click Read full information...

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NC Business Court On Changing A Witness’ Deposition Testimony

It is one of the most frustrating things you can have happen after concluding a successful deposition.  The witness backtracks on all the substantive admissions she has made during her testimony. Can she really do that?  Well, yes.  Rule 30(e) of the North Carolina Rules of Civil Procedure says that the deponent can review her testimony and: If there are changes in form or substance, the deponent shall sign a statement reciting such changes and the reasons given by the deponent for making them. But are there no limits on the changes which may be offered?  Apparently not, based on Judge Bledsoe’s Opinion this month in Window World of Baton Rouge, LLC v. Window World, Inc., 2018 NCBC 78. Plaintiffs’ lawyers were attempting to prevent one of the Defendants (Tammy Whitworth) from making wholesale changes to her deposition testimony via the presentation of an errata sheet.  Those proposed changes included “thirty-eight substantive….. To continue reading this legal news please click Read full information...

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Hybrid Reps Not Held to Highest Standard of Conduct – Yet.

As the debate continues to rage within the financial industry over which professional standard of conduct financial advisors should be held to, a new report suggests that brokers are evolving faster than the rules themselves. According to a new study by securities industry watchdog, FINRA, the Financial Industry Regulatory Authority, the number of so-called "hybrid" brokers has exploded in recent years, now comprising 45% of all brokers. In this, the first ever snapshot of the industry's professional growth conducted by FINRA, the number of total broker-dealers has risen steadily over the past decade. Growth in hybrid reps, however, has easily outstripped growth in both of the discrete categories of broker and investment advisor.What Is a Hybrid Rep or Hybrid Broker?Traditionally, the financial industry has been separated into two distinct quarters, one belonging to stock brokers and financial advisors and the other to investment advisors. In very simple terms,….. To continue reading this legal news please click Read full information...

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