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One scam still making the rounds is the fake check scam.  The way it generally works is this.  You receive an authentic-looking check in the mail that appears to be from a real company. Along with the check, you receive instructions to deposit the check and transfer a portion of the money to someone else.  A few days later your bank informs you that the check was counterfeit and you are now liable for the amount of money transferred out (usually thousands of dollars) and the bank fees for checks you had written that bounced.

FINRA recently issued an Investor Alert warning of two variations of the fake check scam – the mystery shopping scam and the modeling scam.

How the check cashing scams work

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Illegal sales practices: Wells Fargo To Settle

Wells Fargo & Co. has agreed to pay $185 million to settle federal regulators’ investigation for illegal sales practices.  The bank acknowledged that it pushed employees to open as many as 2 million accounts without customers’ approval.  As a result of the scandal, Wells Fargo said, effective January 1, 2017, it would eliminate any sales goals for credit cards, checking accounts and other retail banking products.

The bank’s CEO, John Stumpf, who is set to testify before the Senate Banking Committee on September 19, said he takes responsibility for the improper sales tactics. He indicated that the bank now has improved its training programs and supervision.  The bank also indicated that the employees involved in the improper sales practices were low-level employees and the practices were not intended to increase bank profits.

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What Does it Mean to Trade Stock Options?

Options are complex investments and can carry substantial risk. Before you decide to trade options, you should understand the basics. Options can be used with a wide range of financial products.  This blog will focus on the most vanilla of examples, trading stock options.

What are Options?

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Over $100 Million in Rewards Given to Whistleblowers

The SEC has announced that, as of yesterday, it has made more than $100 million in awards to whistleblowers under the SEC Whistleblower program.  Created by Congress as part of the Dodd-Frank Act in 2010, the program has been up and running since August 2011.  After five years, the program appears to be a resounding success.

Under the whistleblower program, one who voluntarily provides a useful tip to the SEC that leads to the recovery of over $1 million in sanctions may get an award.  The information regarding a securities law violation must be independently known by the whistleblower and cannot be derived from another source.  The amount of the award is discretionary, but under SEC rules, the amount will be between 10% and 30% of the SEC’s recovery.  The amount may be adjusted based on the significance of the information provided, the degree of assistance provided by the whistleblower, the SEC’s interest in deterring future violations, and the whistleblower’s cooperation with a company’s internal compliance and auditing systems.  The Dodd-Frank Act also included anti-retaliation protections, creating both a private right of action for whistleblowers and enforcement mechanisms for the SEC.

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West Palm Beach Securities Fraud Lawyer Explains: Equity Compensation is Not Just for CEOs Anymore

Equity compensation, also known as a stock award, is a form of non-cash compensation that represents ownership in a company.  If the company does well and the value of its stock goes up, the future value of the stock award could be higher than if the employee was given cash today.  Equity compensation is one way for a company to attract or retain talent without having to pay out large salaries.

The popularity of equity compensation for rank-and-file employees, especially among cash-strapped start-up companies, is on the rise.  According to a study done in 2010 by the National Center for Employee Ownership, 28 million employees in the U.S. owned stock or stock options in their companies.  The most common types of equity compensation are stock options and restricted stock units (RSUs).

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When Selling Municipal Bonds What are the Broker’s Obligations

Many brokers and customers mistakenly believe that municipal bonds are always a “safe” place to be.  The recent debacle in Puerto Rico proves this is not the case.

The law imposes special obligations upon brokers who sell municipal bonds.

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Helping Families of Kids With Special Needs Save for the Future  – ABLE Plans

Starting July 1, Florida families with children who have special needs will have another option available to help them save for the future costs of caring for their loved one.  Florida’s ABLE United Program is one of four such plans nationwide.  The ABLE (Achieving a Better Life Act) investment plan will allow families to save tax-free for future expenses, while maintaining government benefits such as Supplemental Security Income and Medicaid.

Who is eligible for a Florida ABLE United Program account?

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Brokerage account statements can be lengthy and complicated.  Having a basic idea of what you are looking at, however, can help you spot mistakes, unauthorized activity, and even fraud. Here are the key types of information generally found on monthly account statements and some potential red flags that warrant follow-up with your brokerage firm.

General Appearance

Account statements should look professional and not look altered in any way.  The brokerage firm’s information and logo should be uniform throughout the statement and should match all of the other documentation you have received from the company – trade confirmations, new account forms, and correspondence.

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The headlines are full of stories of identity theft and investment fraud.  There are steps you can take to keep from being an easy target.

  • Guard your Social Security number! Memorize the number and don’t carry your Social Security card unless you know you are going to need it (for example, it’s your first day at a new job and the employer will want to make a copy of it.)
  • Just Say No. Don’t give your Social Security number to everyone who asks. If you have private insurance, doctors, dentists, laboratories, and other healthcare providers generally do not need your Social Security number to process your claim – they should only need your insurance information. If the medical provider asks for it, ask why they want it and what happens if you don’t want to give it. Be prudent in deciding whether to give it to them. Similarly, public schools, summer camps, and frequent shopper cards often request Social Security numbers, but if the number isn’t required to enroll in those programs, you shouldn’t give it.  For more information, review the Social Security Administration’s pamphlet Identity Theft and Your Social Security Number.