Category Archives: Steepeners

McNally Financial Services Discloses Regulatory Sanction Over Sale of Steepener Investments-San Antonio, TX

San Antonio, Texas

According to publicly available records San Antonio-based brokerage firm McNally Financial Services  (CRD#121196) , discloses two prior regulatory events.

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

In 7/2013 McNally Financial Services was censured and fined $15,000 to resolve FINRA allegations that the firm failed to establish and maintain an adequate supervisory system and written supervisory procedures governing its sale of Steepeners to it customers, thereby violating NASD Rule 3010 and FINRA Rule 2010. FINRA alleged that the sale of Steepeners was a significant part of McNally’s business during the relevant time period. FINRA AWC 2011025617101

STEEPENER INVESTMENTS

According to the FINRA allegations: ” Steepeners are complex, non-conventional products. They are typically longer-term notes and certificates of deposit with 10 to 20 year maturity dates. Steepeners pay interest rates that are fixed initially and float thereafter based on the “steepness” of the yield curve.’ The steeper the yield curve, or wider the spread between long- and short-term interest rates (typically, the benchmark rate is the constant maturity swap rate), the higher the interest rate paid. Conversely, the flatter the yield curve, or narrower the spread between long and short-term rates, the lower the interest rate paid. Steepeners are typically callable by the issuers after a relatively short, pre-specified period of time (e.g., one year).”

See FINRA’s Investor Alert regarding Steepeners issued in November 2011.

Depending on the terms of the particular Steepener investment, it may not be suitable for someone who is retired or who is seeking a conservative investment strategy.

McNally Financial Services has been a FINRA member since 2002. They have about 22 registered representatives in branch offices located in Texas, California, Florida and Nevada.

 

If you have questions about an account with McNally Financial Services, call to discuss your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Investors Capital Corp.-How to Recover Damages For Investment Losses

November 2016- Lynnfield, MA

Investors Capital Corp.  will be closing down and transferring some of its brokers and current clients to another firm within the Cetera network of broker dealers, according to a spokesman for Cetera Financial Group.

RCS Capital, Cetera’s parent has been in bankruptcy and this consolidation is part of their restructuring. The company has announced that  it will also close down VSR Financial Services , another small independent broker dealer as well. It is expected that most of the current brokers of VSR and Investors Capital will be asked to join Summit Brokerage Services, a related entity which is headquartered in Boca Raton, FL.

Investor’s Capital Corp. Recent Regulatory Issues

October 2016-According to FINRA records, Investors Capital Corp agreed to pay $1.1 million in fines and restitution to resolve FINRA allegations that sales procedures for the sale of unit investment trusts (UITs) were inadequate. A UIT is a mix between an actively managed fund and a fixed portfolio of income producing securities.  UITs are generally intended as long term investments.

According to the FINRA sanction several Investors Capital brokers traded UITs on a short term basis causing losses to customers.

August 2016-Pennsylvania securities regulators fined Investors Capital Corp. $100,000 for failures in supervising its brokers.

Recovery of Investment Losses From Investors Capital Corp.

If you have suffered losses in an account at Investors Capital Corp. you may be able to recover damages through FINRA arbitration. Time is of the essence, so if you have a claim, you would be wise to pursue it immediately. Call to discuss your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Investors Capital Corporation Fined $250,000 by Securities Regulators

October 2014

The FINRA records of  Investors Capital Corp.,  a  broker dealer headquartered in Lynnfield, MA,  that employs about 640 people in 313 branch offices nationwide, disclose a recent regulatory matter.

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

In October 2016, Investors Capital Corp. (ICC) entered into a Letter of Acceptance, Waiver and Consent with FINRA to resolve allegations that certain of its brokers recommended unsuitable short term trading of unit investment trusts (UITs) and Steepener Notes in the accounts of 74 customers. In addition FINRA alleged that ICC failed to apply sales charge discounts on certain purchases.

One example cited by FINRA is a 68 year old customer with an investment objective of income was sold 59 UITs with two year maturities. The average holding period was three months resulting in losses of over $32,000.

Steepeners are complex, structured products that allow investors to bet on the shape of the yield curve. The return is linked to the spread between the longer and shorter-term interest rates, ie; the steepness curve. Steepeners have long maturities generally, from 20-30 years, and the secondary market for these investments may be limited or nonexistent, making them unsuitable generally for retirees.

ICC consented to a censure, a fine of $250,000 and to pay restitution of $841,000 to the affected customers.

Investors Capital Corp. Is Winding Down

 In June 2016, ICC notified FINRA of its intent to wind down its business and to withdraw its broker dealer registration. If you have questions about how your account was handled at Investors Capital Corp, call to discuss your legal options.

INVESTORS CAPITAL CORP. SUBJECT OF 21 REGULATORY MATTERS–CEASES OPERATIONS FALL 2016

Investors Capital Corp. withdrew its registration with FINRA in fall 2016. Investors Capital has been named in 21 regulatory matters and a number of customer arbitrations. For more information on Investors Capital Corp, follow this link. 

 

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870