Posts Tagged ‘ Securities Fraud ’
Week Adjourned: 3.4.11
March 4th, 2011. By LucyC
Top Class Actions
Glass Ceiling with a $100M Price Tag at CIGNA? Well, this has certainly been a time for discrimination class actions. Filed, that is. Topping the list—Cigna Health Care—based on the number of potential plaintiffs—dollars. This one’s all about gender discrimination—in the form of a hostile work environment and differential treatment of males and females occurs company-wide the suit alleges.
The complaint, filed by Ms. Bretta Karp, a long-time contracting manager with Cigna, claims that Ms. Karp and other female employees were disriminated against by treating them less favorably than male employees in similar positions and by subjecting all females to intentional, deliberate and wilful discriminatory denials of promotions and pay raises, discriminatory evaluations, disparate terms and conditions of work, harassment, hostile work environments, and other forms of discrimination in callous disregard of their rights.
The complaint further details that CIGNA has created a hostile work environment where male supervisors harass and intimidate female employees, where management has made clear that it favors male employees over women, and where company investigations into complaints made by female employees are either nonexistent or superficial and inadequate.
And the amount sought in damages? $100 million baby—along with litigation costs and Read the rest of this entry »
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 »
Week Adjourned: 2.4.11
February 4th, 2011. By LucyC
Top Class Actions
Phantom of the iPhone. Do you have a phantom AT&T account? It seems for every new technological gadget that requires connectivity—there’s an opportunity to take advantage. Most recently, AT&T Mobility got hit with a potential class action lawsuit over allegations associated with iPhone and iPad accounts. The suit claims that “AT&T’s bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account.” And, the suit alleges that AT&T bills customers on data transactions even when customers have disabled their phones. Doesn’t a transaction require more than one party?—one party in the know?
The named plaintiff, Patrick Hendricks, claims that AT&T’s overbilling “was discovered by an independent consulting firm retained by plaintiff’s counsel, which conducted a two-month study of AT&T’s billion practices for data usage, and found that AT&T systematically overstated web server traffic by 7 percent to 14 percent, and in some instances by over 300 percent. So, for example, if an iPhone user downloads a 50 KB website, AT&T’s bill would typically overstated the traffic as 53.5 KB (a 7 percent overcharge) to as high as 150 KB (a 300 percent overcharge),” the complaint states.
Here’s the kicker—Hendricks also alleges that “Not only does AT&T systematically overbill for every data transaction, it also bills for phantom data traffic when there is no actual data usage initiated by the customer. This was discovered by the same independent consulting firm, which purchased an iPhone from an AT&T store, immediately disabled all push notifications and location services, confirmed that no email account was configured on the phone, closed all applications, and let the phone sit untouched for 10 days. During this 10-day period, AT&T billed the test account for 35 Read the rest of this entry »
6 Tips to Avoid a Ponzi Scheme
February 3rd, 2011. By Kristine B
They are two words that no investor wants to hear: Ponzi scheme. As in, your money was invested in a Ponzi scheme. People whose money winds up in a Ponzi scheme often have a lot of difficulty getting their money back, especially if they were among the last to invest. There are ways to watch for Ponzi schemes and avoid them. These tips won’t guarantee that you’ll never invest in a Ponzi scheme, but they’ll at least help to reduce the likelihood of it happening.
What is a Ponzi Scheme?
A Ponzi scheme is an investment scheme in which money from new investors is used to pay out previous (or existing) investors. So, when I invest in the scheme (unknowingly, of course), my money is used to pay the would be “ROI” (return on investment) to the people already invested in the scheme. So, in other words, very little real investing occurs. The Ponzi scheme collapses when one of three things happens: there are not enough new investors to pay out previous investors; when large numbers of previous investors demand to be paid out; or when someone becomes suspicious about where the money is coming from. In recent times, the Bernie Madoff Ponzi scheme made headlines—and Carr Miller is now facing allegations of a Ponzi scheme as well.
The Downside of Ponzi Schemes
Because the money isn’t really invested as it’s purported to be, the scheme requires new investors to keep it going. But those new investors, if no one else invests after them, won’t get their money back. Their money has either gone to previous investors or has gone to fund a lavish lifestyle on the part of the person in charge of the scheme. Nice, huh? All your hard-earned money just bought some guy a fancy car and a trip to a luxury resort, while you thought it was sitting in honest investments.
Even previous investors who were paid out might not be safe. Why? Because the money they were given was illegally gained. So they might have to give some or all of it back to a trustee who then determines how to split up whatever money remains—if any does.
How to Avoid Ponzi Schemes
1) Don’t invest with someone just because your friends/colleagues/associates do.
There’s no guarantee that they’ve done their homework about an investment. Furthermore, if Read the rest of this entry »
10 Clues you’re with the wrong Investment Broker
March 10th, 2010. By AbiK
Nowadays, just about everybody’s been wondering if their money’s in the right place. But economic woes aside, these ten clues ought to give you that something’s-not-right feeling in your gut when it comes to your investment broker’s handling of your account—and possibly grounds for a securities fraud case…
1. There’s inconsistency between your broker’s verbal statements and the performance of your investments.
2. There are misrepresentations by your broker, or important information about an investment which the broker did not disclose—particularly regarding the investment’s level of risk.
3. If you notice frequent and excessive trading in the account, including “in and out” trading.
4. You notice trading in high risk, speculative or unsuitable investments.
5. Your broker is managing your account by trading in securities and strategies that you don’t understand.
6. Your broker is making trades that you did not previously authorize.
7. There is trading in low-value securities or obscure companies on foreign exchanges, or private investments.
8. Your broker—or his supervisor—fail to respond to your complaints.
9. Your broker makes repeated promises to make up for losses through various devices.
10. There is a loss of funds or value in the account that you do not understand, and your broker cannot reasonably explain.
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