Monthly Archives: March 2014

Former Merrill Lynch and Smith Barney Broker Jane E. O’Brien Indicted on Federal Charges

Jane E. O’Brien, a former registered representative of Merrill Lynch and Smith Barney, was recently indicted on federal counts of mail fraud, wire fraud and investment adviser fraud in connection with her alleged misappropriation of $1.3 million of customer funds.

O’Brien is already serving a 33-month jail term for securities fraud. In May 2013, she was found guilty of defrauding a customer for $240,000 through the sale of a fictitious security.

The new counts relate to O’Brien’s alleged activities between 1995 and 2013.  O’Brien allegedly convinced some clients to withdraw money from bank and brokerage accounts so that she could make investments on their behalf in private placement securities.  O’Brien allegedly utilized the misappropriated funds to pay personal expenses and to make Ponzi payments to other customers.

O’Brien allegedly convinced one victim to make an investment in the film “Crooked Arrows,” but simply misappropriated the funds that were provided to her for the investment.

Blau & Malmfeldt invites Merrill Lynch and Smith Barney customers who were victimized by O’Brien to contact us at 312-443-1600 for a complimentary case evaluation.  Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.

FINRA Fines Berthel Fisher Over Non-Traded REIT and Inverse ETF Sales

The Financial Industry Regulatory Authority (FINRA) recently fined broker-dealer firm Berthel Fisher & Company Financial Services, Inc. (Berthel Fisher) and its affiliate, Securities Management & Research, Inc. (Securities Management) $775,000 for supervisory deficiencies. This came as Berthel Fisher and Securities Management failed to supervise sales of non-traded real estate investment trusts (REITs) and leveraged and inverse exchange-traded funds (ETFs) by their registered representatives.

The questionable sales activity took place from January 2008 to December 2012. FINRA discovered that the firms did not have adequate supervisory systems and written procedures in place for sales of the following alternative investment products: non-traded REITs, managed futures, oil and gas programs, equipment leasing programs and business development companies.

In some instances, the firms also failed to either accurately calculate concentration levels for these investments or correctly enforce suitability standards.

Additional questions arose around the sales of leverage and inverse ETFs during the period of April 2009 to April 2012. According to FINRA, Berthel Fisher did not have a “reasonable basis” for certain investment sales and it also did not “adequately” research or review non-traditional ETFs before allowing its registered representatives to make customer recommendations.

Blau & Malmfeldt invites Berthel Fisher customers to contact us at 312-443-1600 for a complimentary case evaluation.  Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.