Posts Tagged ‘ Arbitration ’

Insecurities: Securities Fraud Roundup 2.23.11

February 23rd, 2011. By LucyC

Top Securities Fraud Stories

Tired of losing money? WFC (NYSE)—also known as Wells Fargo—was known as Wachovia—is being sued. Hard to believe, I know—especially in these times. But it seems that a retired woman in Florida has had enough of losing money with her IRA investments, and figures the odds of actually recovering her money—never mind making any—are better with seeking a Wells Fargo class action lawsuit. So she’s filed a claim. 

The back story: The plaintiff gave her Wachovia broker a ‘second chance” (why?) to “do a better job” (read ‘make money not lose it’) with her IRA investments—but apparently, that didn’t work out so well. 

In fact, the securities fraud case claims that WFC “breached its duty to make suitable recommendations; mis-marked her investment objective and risk tolerance; and engaged in short term trading and speculating on Latin America and China mutual funds, and on ‘ultra bull’ leveraged exchange traded funds.” That doesn’t exactly read like the manifesto for conservative value investing. 

The WFC broker also stands accused of “excessive trading”: the claim contends that the broker “generated an annual turnover rate of more than 17 times the average monthly equity in Claimant’s IRA.” 

And “Wells Fargo “needed an accurate customer profile to make suitable recommendations in Claimants IRA—including her investment objectives and risk tolerance, time frame, withdrawals, annual income, net worth, investment experience and her employment. Instead, the broker’s key forms included both contradictory and untrue information about Claimant,” the claim alleges. 

And then there’s a raft of securities fraud class actions stemming from unbridled optimism—also known as concealing the facts or ‘failure to disclose’…

Failure to Disclose Club

Where members vie for position on the Madoff meter.

Company:          Bank of America Corporation (BofA)

Ticker:               BAC

Class Period:    Jan-20-10 to Oct-19-10

Court:               Southern District of New York

Madoff Meter Rank:    

Let’s start with BofA (BAC:NYSE), the largest bank in the US. Just how many class actions have they faced in the past 12 months? This latest was filed by an institutional investor on behalf of purchasers of BofA common stock during the period between January 20, 2010 and October Read the rest of this entry »

Tags: Arbitration, Insecurities, Securities Fraud, Stock Fraud
Posted in Emerging Issues, Securities | No Comments »

Mandatory Binding Arbitration: Bet you have it, don’t even know it

November 27th, 2009. By Kristine B

Or know what the h*$$ it is…

So, the good news (that’s right, there is some good news these days) is that some companies are dropping the mandatory arbitration clauses in their contracts. Of course, not every company is doing this. And the truth is that most people sign contracts and have no idea that they have signed a mandatory arbitration clause (even I’ve done it). So, this week’s Pleading Ignorance looks at mandatory arbitration. Because what you don’t know about mandatory arbitration really can hurt you.

So, What is Arbitration, Anyway?

Arbitration is a method of resolving disputes that avoids going to court. Now, you may be thinking that avoiding court is good for you—and it can be—but it can also be a bad thing, which I will get into later.

Arbitration involves both sides of a dispute presenting their cases before either one arbitrator (kind of like a judge in a court case but with less power) or an arbitration panel. The arbitrator or the panel then determines who is in the right.

In binding arbitration, the arbitrator not only determines liability (i.e., who’s wrong) but also determines an award for the wronged party (if an award is necessary). Also, the arbitrator’s decision is final. That’s it. No appeals, no further dispute, nothing. Case closed. That can be a good thing, if you find yourself on the winning side but of course, if you’re on the losing side, you have no chance to appeal the decision.

In non-binding arbitration, liability is determined but no award is handed out. The arbitrator can merely suggest possible awards but the two sides do not have accept those suggestions.

Arbitration sounds okay so far, right? Read the rest of this entry »

Tags: Arbitration, Binding Arbitration, Pleading Ignorance
Posted in Emerging Issues, Pleading Ignorance | 1 Comment »