NASD RULES AGAINST AMERIPRISEAn NASD arbitration panel ordered an Ameriprise Financial Inc. subsidiary to pay out as much as $9.3 million to three former pilots for American Airlines who charged that a broker for the financial services' subsidiary, Securities America, squandered their retirement savings on mutual funds that contained high fees and trading costs.
The panel ruled that Securities America and broker Robert P. Gormly Jr. are jointly liable for $3.9 million in actual damages and $2.4 million in attorney fees. Securities America also must pay $3 million in punitive damages.
The ruling marked the second judgment awarded to Ameriprise clients in less than a year. In September, the NASD ordered Ameriprise to pay $22 million to 32 former Exxon employees who claimed a broker urged them to cash out their company investment plans, retire and re-invest the money with Securities America.
STUDY: SECURITIES CLASS ACTIONS AT ALL-TIME LOW
The number of securities fraud class actions filed in 2006 was the lowest in a calendar year since the adoption of the Public Securities Litigation Reform Act of 1995, according to a new report.
The Securities Class-Action Filings 2006 Year in Review report, released by the Stanford Law School Securities Class-Action Clearinghouse, reports that securities fraud class actions decreased by 38 percent since 2005 - plunging from 178 filings to just 110. The year's numbers were nearly 43 percent lower than the 10-year historical average of 193.
The study attributes the record low numbers of securities fraud class-action filings in 2006 to three primary factors:
* The strengthened federal enforcement environment, reflected in the pressure that the Securities and Exchange Commission and Department of Justice now bring to bear on corporations to conduct internal investigations that implicate the individual executives responsible for the fraud;
* A strong stock market, which, when combined with lower stock price volatility, typically reduces the number of cases filed; and,
* The conclusion of the majority of securities fraud actions that were filed from the late 1990s to the early 2000s.
The full text of the report can be found at http://securities.stanford.edu.
SEC RELEASES PROTECTION, PRIVATE OFFERING GUIDELINES
The SEC has released a proposal that is intended to provide additional protections to investors in hedge funds and other pooled investment vehicles. The rule, 206(4)-8, would make it a fraudulent, deceptive or manipulative act, practice or course of business for an investment advisor to a pooled investment vehicle to make false or misleading statements or to otherwise defraud investors or prospective investors.
In a separate ruling, the SEC put forth an amendment to private offering rules that would define a new category of accredited investor that would apply to offers and sales of securities issued by hedge funds and other private investment pools to natural persons.
DELOITTE UNVEILS PLANNING GUIDE
Deloitte Tax LLP has announced that its Essential Tax & Wealth Planning Guide for 2007 is now available free of charge on its Web site (deloitte.com). The guide serves as a reference tool and roadmap for wealth planning in 2007, and provides insight about financial, investment, wealth transfer and tax planning matters.
