Today, UBS Group AG announced that its net profit almost doubled in the third quarter to nearly $2.1 billion from $1.05 billion from a year earlier.

Meanwhile, as UBS and other large investment banking firms continue to rake in huge profits, UBS’s Yield Enhancement Strategy investors continue to suffer avoidable losses.

UBS’s Yield Enhancement Strategy, or YES, is a complex managed options strategy that UBS marketed as a safe, market-neutral overlay that would provide incremental returns to an investor’s portfolio.

FINRA has suspended Frank Venturelli from the securities industry for 11 months.  Frank Venturelli was a financial advisor and registered representative at the following firms:

  • Arive Capital Markets, Bay Ridge, NY (September 2019 to December 2019); and
  • First Standard Financial Company LLC, Red Bank, NJ (November 2014 to September 2019).

FINRA has permanently barred Jeffrey A. Broten from the securities industry. Jeffrey Broten was a financial advisor and registered representative at the following firms:

  • Newbridge Securities Corporation (affiliated with Black River Wealth Management LTD), Morristown, NJ (August 2019 to December 2019);
  • First Standard Financial Company LLC, Red Bank, NJ (February 2018 to August 2019); and

The Financial Industry Regulatory Authority (FINRA) has postponed in-person arbitration hearings and mediations through January 1, 2021. The latest FINRA administrative postponement follows the health crisis’ evolving nature and affects all active cases scheduled for a hearing before a FINRA arbitration panel through that date. In response, customers have sought to hold virtual securities arbitration hearings via Zoom. The goal of these customer requests is to avoid unnecessary delays and resolve their claims in a timely manner by keeping their original hearing dates on the calendar. Virtual hearings are particularly critical for elderly investors or investors in poor health. Yet, arbitration panels have denied investors’ requests for a virtual arbitration hearing in 27% of cases. That means that almost 3 in 10 investors who wished to proceed with a virtual hearing were prevented from doing so. FINRA should take bolder action, and as an equitable forum, it should act to address this uneven disposition by arbitration panels, which unfairly prejudices nearly a third of investors. FINRA should amend its rules and automatically convert in-person hearings canceled due to COVID-19 to virtual hearings.

Seventh Circuit Court of Appeals Precedent and the Potential for Indefinite Delays

 There is already precedent out of the Seventh Circuit Court of Appeals in favor of virtual hearings. Clunkier than an in-person hearing? Sure. But both sides will deal with logistical challenges, ruled a Federal Judge. There is no unfair prejudice to either party in holding a hearing on Zoom. The way the system is currently set up, motion practice is required. Both the Claimant and the Respondent present their arguments for or against holding a virtual hearing, and the arbitration panel then issues its order. A uniform solution by the regulator, albeit a temporary one, seems better than arbitration panels granting some motions for virtual arbitration hearings while denying others. It makes little sense, particularly at a time of uncertainty and health risks for everyone involved in the process.

The global campaign promoting investor education and protection kicked off this week. Securities regulators in the U.S. issued a joint investor bulleting highlighting key themes for investors. Among them, the benefits of holding long-term investments, the rise of COVID-19 scams, the need for investors to use resources available to confirm that they are dealing with a reputable firm, and the importance of asking questions to financial professionals.

All sensible topics, to be sure. However, given the campaign’s scope and the multitude of stakeholders involved, the campaign misses an opportunity to have a meaningful impact where it matters most: enhancing investor protections for Main Street.

FINRA’s 2019 statistics show that it imposed $39.5 million in fines to member firms and ordered $27.9 million in restitution to investors. FINRA imposes monetary fines to member firms when it identifies misconduct. These fines also have the added goal of discouraging further misconduct. Restitution is used to address the issue of an investor unjustly suffering a monetary loss. Luckily for those investors, FINRA was able to make them whole. But what about cases that did not involve action by the regulator or went unreported?

We are proud to announce the launch of our securities arbitration boutique, Iorio Altamirano LLP.

We intend to build a client-focused national practice that offers a bold approach and aggressively pursues the recovery of investment losses on behalf of clients. Our new firm will represent individual investors, groups of individuals, business entities, family offices, credit unions, and institutional investors.

“We have a strong commitment to transparency. It is rooted in who we are as attorneys and as a law firm. Our core values of integrity, excellence, and grit will help us deliver results for our clients,” said partner August Iorio.

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