By Breaking Legal News, Breaking Legal News.

Federal authorities are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, The Wall Street Journal reported on Saturday, citing people familiar with the matter.

The three-year criminal and civil investigation could result in charges by the end of the year, the Journal reported. A federal grand jury in New York has heard evidence, the paper said. Since the investigation isn't finished, it's unclear what charges, if any, may be brought.

One focus of the criminal investigation is whether independent analysts and consultants who work for companies that provide "expert network" services to hedge funds and mutual funds passed along nonpublic information, the Journal reported. Such companies set up meetings and calls between current and former managers and traders who want an investing edge.

The newspaper said one firm under examination is Primary Global Research LLC of Mountain View, Calif., which connects experts with investors seeking information in the technology, health-care and other industries. Chief Operating Officer Phani Kumar Saripella declined to comment to the Journal. The firm's website says Saripella and the firm's CEO previously worked for Intel Corp.

Prosecutors and regulators are also examining whether bankers from Goldman Sachs Group Inc. leaked information about transactions, including health-care mergers, to the benefit of certain investors, the Journal reported, based on anonymous sources. Goldman declined to comment to the newspaper.

The examination includes independent analysts and research boutiques. John Kinnucan, a principal at Broadband Research LLC in Portland, Ore., described a visit by FBI agents in an Oct. 26 e-mail to roughly 20 hedge-fund and mutual-fund clients. The Journal said Kinnucan confirmed that he wrote the e-mail, which was addressed to traders at firms including the hedge funds SAC Capital Advisors LP and Citadel Asset Management, and mutual-fund companies Janus Capital Group, Wellington Management Co. and MFS Investment Management. None of the firms commented to the Journal, and it isn't known whether they are under investigation for their business with Kinnucan.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

The man who nearly took down the French banking system is on the hook for millennia.

Jérôme Kerviel, the low-level trader whose rogue bets cost Société Générale €4.9 billion ($6.7 billion) in early 2008, was convicted today by a French court and ordered to repay the bank's losses.

At Société Générale, Kerviel earned about €100,000 a year ($137,000), the Journal has reported. At that rate, it would take Kerviel 49,000 years to repay what he owes. That would be a serious display of fortitude for a man Société Générale's co-CEO has called "mentally weak."

Kerviel's lawyer said he would appeal his conviction, and the financial damages are likely to be on hold while an appeal is underway. French media said Kerviel is earning about €2,300 a month as a computer consultant, according to the Associated Press. Repayment rate: Nearly 178,000 years.

Of course, the 33-year-old Kerviel isn't employed at Société Générale. Instead of eyeballing stock indexes at the bank's "Delta One" desk in Paris, he was ordered to prison for three years. Kerviel's conviction today on charges of breach of trust, forgery, and unauthorized computer use also included a lifetime ban on trading.

If Kerviel is freed to work, he'll make at least the French minimum wage of €1,343.77 a month, according to Eurostat. At that pace, it would take Kerviel nearly 304,000 years to repay his fine.

Originally posted at Breaking Legal News. Please visit http://breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

The securities industry has tough rules when it comes to brokers soliciting the purchase of “penny stocks.”  Typically a stock is considered a “penny stock” when it trades for less than $5 a share and it does not trade on a major exchange (e.g., New York Stock Exchange or NASDAQ). 

Penny stocks normally trade on the OTC Bulletin Board (OTCBB) or Pink Sheets.  Aside from the requirements, among others, that soliciting brokers have to supply investors with a document disclosing the risks associated with penny stocks and wait, in some cases, 2 days after providing the disclosure document before placing your first order (i.e., “speed bump”), there are actual disclosure ratings assigned to each penny stock. 

A market center called OTC Markets places penny stocks into different disclosure categories based on things from whether or not the company is current on its financial reporting to whether the stock is the subject of fraud or stock promotion.  Your broker and his brokerage firm and clearing firm have access to this information and so do you.  There are over 13,000 stocks having either the label of “Caveat Emptor,” “Grey Market,” or “Pink Sheets No Information.”  Have you bought a penny stock recommended by a stock broker that has one of those labels?  Did your broker disclose that to you?

http://suemyadvisor.com/blog/investor-alerts/penny-stock-risks-caveat-emptor-74

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

The Securities Arbitration Firm of Menzer & Hill, P.A. Announces Investigation Into The Sales Practices Of Broker-Dealers That Solicited Purchases of Inverse and Leveraged Exchange-Traded Funds (ETFs)

The Securities Arbitration Firm of Menzer & Hill, P.A. (www.suemyadvisor.com) announced today that it is investigating the sales practices of brokerage firms that solicited investors to buy leveraged and inversed Exchanged-Traded Funds (“ETFs”). Many brokerage firms, through their financial advisors, are soliciting purchases in these securities as investments, with holding periods longer than one day, while others are recommending option strategies on the underlying ETFs. The Financial Industry Regulatory Authority (“FINRA”), stated in a Regulatory Notice, sent to brokerage firms June 2009, that leveraged and inverse ETFs are “highly complex financial instruments” and “are typically not suitable for retail investors who plan to hold them for more than one trading [day], particularly in volatile markets.” Brokerage firms that failed to adhere to suitability requirements could be held liable to investors that sustained losses in solicited purchases of leveraged and inverse ETFs as a result.

Investors that have purchased leveraged or inverse ETFs through a brokerage account or managed account offered by Merrill Lynch, a subsidiary of Bank of America (NYSE:BAC), Morgan Stanley Smith Barney (NYSE:MS), Wells Fargo Advisors (NYSE:WFC), Ameriprise Financial (NYSE:AMP), UBS (NYSE:UBS), LPL Financial, Raymond James (NYSE:RJF), Edward Jones, or other brokerage firms and have sustained losses should contact the attorneys at the Securities Arbitration Firm of Menzer & Hill, P.A. to determine if they have a claim for a recovery of losses.

Leveraged and inverse ETFs can be volatile and investors may have realized or unrealized losses in the following ETFs year to date, including but not limited to:

DRV down 63% (NYSEArca: DRV);

TMV down 46% (NYSEArca: TMV);

VXX down 44% (NYSEArca: VXX);

SRS down 43% (NYSEArca: SRS);

ZSL down 42% (NYSEArca: ZSL);

GAZ down 38% (NYSEArca: GAZ);

TZA down 36% (NYSEArca: TZA);

UNG down 35% (NYSEArca: UNG);

TBT down 34% (NYSEArca: TBT);

FAZ down 29% (NYSEArca: FAZ); and

UCO down 28% (NYSEArca: UCO).

For a free case evaluation or to discuss any other investment losses, please contact the Securities Arbitration Firm of Menzer & Hill, P.A., at 888-923-9223, or visit us on the web at www.suemyadvisor.com.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

Menzer & Hill, P.A. represents investors in the recovery of losses at the result of brokerage firms' failure to supervise their financial advisors who engage in unsuitable investment recommendations, the excessive trading of investors' accounts, inappropriate allocation of portfolio assets, misrepresentations and/or material omissions of fact resulting in fraud, negligence, breach of fiduciary duties, selling away, failure to advise their clients of risk management strategies and excessive use of margin.

In addition to their legal and arbitration experience, the attorneys and founding partners of Menzer & Hill, P.A. bring with them extensive securities industry experience which include in-house and chief corporate brokerage counsel, chief compliance officer supervising and regulating the practice of stockbrokers and financial advisors, as well as sales experience with advising clients and recommending the sale of securities and insurance.  The attorneys and founding partners have essentially switched hats where they once represented the industry and broker-dealers, they now represent aggrieved investors.  This yields a unique experience giving the firm intimate knowledge of the misconduct of brokers and the details and nuances of the securities and insurance products they recommend.

Practice Areas

We represent clients in cases involving the following practice areas:

• Securities Arbitration / Litigation
• Annuities and Insurance Arbitration / Litigation
• Investment Advisor and Financial Planning Arbitration / Litigation
• Hedge Fund and Alternative Investment Fraud Arbitration / Litigation
• Futures and Commodities Arbitration / Litigation
• Broker Representation

Investigations/Cases

Based on current events and regulatory focus on these special securities and products, these are some of the areas that Menzer & Hill, P.A. are investigating:

• Exchange Traded Funds (ETFs)
• Indexed Annuities
• Variable Annuities
• Structured Products

Menzer & Hill, P.A. is truly dedicated and devoted to making sure that the average investor is protected and represented against the abuses of Wall Street.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

The Securities and Exchange Commission is looking into certain types of stock trade orders that could be distorting share prices and trading volume, according to The Wall Street Journal.

The SEC is investigating the practice called "quote stuffing" where exceptionally large numbers of orders to buy or sell stocks are placed and canceled almost immediately, the Journal said citing anonymous sources. It is also reviewing another practice known as "sub-penny pricing," where orders are priced in increments smaller than a penny, but are far from the price at which the stock is trading.

Quote stuffing and sub-penny pricing have become more prevalent as high-frequency computer trading has become the dominant part of the stock market in recent years, the Journal said.

The SEC could also be trying to determine if the pair of practices played a role in the May 6 "flash crash," a panicked disruption in trading that saw the Dow Jones industrials drop hundreds of points in minutes.

The Journal said the SEC wants to figure out if the practices artificially drive stock prices lower or help make it appear there is more trading volume than there truly is, which would allow sellers to profit from perceived rising demand. Manipulating share prices to benefit from the distortions would be considered illegal.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

Connecticut's Supreme Court has dismissed a lawsuit against the state by workers who said they were entitled to $127 million in stock proceeds used by the state to fill a budget gap.

The 6-1 decision issued Wednesday centers on 2.2 million shares that Anthem Insurance Co. issued when it converted from a mutual company to a stock company in 2001.

Former public defender Ronald Gold alleged he and up to 40,000 other state workers were entitled to the profits as policyholders. The state said the government, not the individuals, held the policy.

Gold's attorney says they still have a pending lawsuit against Anthem, alleging it gave the stock to the wrong entity.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

Ali Hariri, a former executive at Atheros Communications, pleaded guilty Wednesday to conspiracy and securities fraud in what federal prosecutors call the largest hedge fund inside trading case in history. It is one in a series of guilty pleas through which prosecutors are trying to draw a net around Raj Rajaratnam, founder and operator of the Galleon Hedge Fund.

Hariri admitted he tipped off a co-conspirator to Atheros' earnings report. The co-conspirator then bought more than half a million shares of Atheros before the public announcement sent the share price up by 6 percent. The co-conspirator made hundreds of thousands of dollars from the trades.

Hariri, 38, of San Francisco, faces a maximum of 25 years in prison at his June 10 sentencing.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

Airgas Inc urged its shareholders on Monday to reject a $5.1 billion tender offer from larger rival Air Products & Chemicals Inc, arguing the offer substantially undervalues the industrial gas supplier.

The move was widely expected, and Airgas investors now have until April 9 to formally consider Air Products's $60-per-share cash offer.

However even if a majority of Airgas shareholders sell their shares, the Airgas board still has a "poison pill" in place to keep any one party from acquiring too large a stake.

Allentown, Pennsylvania-based Air Products took the bid hostile earlier this month by launching the tender after being privately rejected twice by Airgas's board.

If successful, Air Products would become the biggest industrial gas company in North America, allowing Air Products to gain substantial benefits from the economy's resurgence after the recession abates.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

Airgas Inc urged its shareholders on Monday to reject a $5.1 billion tender offer from larger rival Air Products & Chemicals Inc, arguing the offer substantially undervalues the industrial gas supplier.

The move was widely expected, and Airgas investors now have until April 9 to formally consider Air Products's $60-per-share cash offer.

However even if a majority of Airgas shareholders sell their shares, the Airgas board still has a "poison pill" in place to keep any one party from acquiring too large a stake.

Allentown, Pennsylvania-based Air Products took the bid hostile earlier this month by launching the tender after being privately rejected twice by Airgas's board.

If successful, Air Products would become the biggest industrial gas company in North America, allowing Air Products to gain substantial benefits from the economy's resurgence after the recession abates.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.