|
December 22, 2008
Michaels, Ward & Rabinovitz Partner quoted by Investment News Magazine
Pete Michaels was quoted in a recent article in Investment News Magazine. For that article, "Brokers are Cleared in Selling Away Cases", Mr. Michaels was interviewed about the in and outs of trying cases against securities regulators. In the case that formed the basis for the article, two Dallas-based brokers were accused by FINRA of violating the "selling away" rules. They lost the case at the trial level, but in an unusual move, the SEC reversed the FINRA Hearing Panel (and the National Adjudicatory Council). Securities fraud attorneys around the US were surprised by the result. In dismissing the case, the SEC chided FINRA for attempting a "novel interpretation" of the selling away rules. Even though they ultimately won, however, the wheels of justice moved slowly for the broker accused of misconduct. The brokers were charged by FINRA in 2002, and have been battling the securities regulator for over 6 years. The full text of the article may be found at
www.investmentnews.com/apps/pbcs.dll/article?AID=/20081130/REG/312019966/1077/TOC&ht=
December 1, 2008
Michaels, Ward & Rabinovitz, LLP Attorney Publishes Securities Regulation Practice Tips.
Michaels, Ward & Rabinovitz, LLP partner Pete S. Michaels published “Surviving Your First OTR: Ten Tips for Young Lawyers” in the Fall 2008 issue of Securities Litigation Journal. The article is intended to assist young lawyers who may just be starting their regulatory defense practice. Mr. Michaels is also a co-editor of Securities Litigation Journal, which is published by the Securities Litigation Committee of the American Bar Association. Information about the Securities Litigation Committee can be found at http://www.abanet.org/litigation/committees/securities/home.html
November 1, 2008
Michaels, Ward & Rabinovitz, LLP Attorneys Receive Super Lawyer Honors
Michaels, Ward & Rabinovitz is proud to announce that Pete S. Michaels and Daniel M. Rabinovitz have been listed in the 2008 edition of New England Super Lawyers, as featured in the November issue of Boston Magazine. Michaels, Ward & Rabinovitz, LLP attorney Jennifer R. Seltenrich is featured in the same issue as a “Rising Star”. The Super Lawyers selection process creates a comprehensive listing of the nation’s top attorneys in their respective practice areas. The process requires, among other things, that attorneys be nominated and selected by their peers. Both Mr. Michaels and Ms. Seltenrich were chosen in securities litigation, and Mr. Rabinovitz was selected in the field of business litigation. In addition, all three lawyers will also be listed in the national publication, Super Lawyers Corporate Counsel Edition, to be published in early 2009.
October 23, 2008
Terrie Stanley Honored at Mass Lawyers Weekly Luncheon
Michaels, Ward & Rabinovitz, LLP paralegal Terrie Stanley was honored at a luncheon at the Boston Convention Center on October 23, 2008. Ms. Stanley, along with other nominees from across Massachusetts, was nominated as an “Unsung Hero”. Unsung Heroes are chosen by a panel of judges in 10 categories, including Secretary, Marketing, Paralegal, Firm Administrator, Librarian, Accounting and Human Resource Professional. Michaels, Ward & Rabinovitz, LLP congratulates Ms. Stanley on her nomination.
September 30, 2008
Michaels, Ward & Rabinovitz, LLP participates in the Annual Back to School Project for Homeless Children
In Massachusetts, 40,000 school aged children started school this year that did not have a permanent place to call home. The daily obstacles of domestic violence and poverty added with the stress and anxiety of starting a new school year are an unfortunate reality for these children’s daily lives. This year Michaels, Ward & Rabinovitz teamed up with the Massachusetts Paralegal Association to collect backpacks full of school supplies to help make these children’s first day a little brighter. We were able to provide seventy-three backpacks overflowing with school materials and three large boxes full with various supplies to the Massachusetts Coalition for the Homeless Annual Back School Drive. Michaels, Ward & Rabinovitz paralegal Katelyn Thoms spearheaded this important initiative for the firm.
August 7, 2008
Client Alert: Citi Agrees to $7.5 Billion ARS Settlement
The Securities and Exchange Commission's Division of Enforcement today announced a preliminary settlement in principle with Citigroup Global Markets, Inc. (Citi) including proposed charges and a plan that would give individual investors, small businesses, and charities all $7.5 billion of their money back from auction rate securities (ARS) they purchased from the firm. The agreement also would require Citi to use its best efforts to liquidate by the end of 2009 all of the approximately $12 billion worth of ARS the firm sold to retirement plans and other institutional investors. Specifics from the SEC Press Release are as follows:
Washington, D.C., Aug. 7, 2008 — The Securities and Exchange Commission's Division of Enforcement today announced a preliminary settlement in principle with Citigroup Global Markets, Inc. (Citi) including proposed charges and a plan that would give individual investors, small businesses, and charities all $7.5 billion of their money back from auction rate securities (ARS) they purchased from the firm. The agreement also would require Citi to use its best efforts to liquidate by the end of 2009 all of the approximately $12 billion worth of ARS the firm sold to retirement plans and other institutional investors.
The ARS market collapsed in mid-February 2008, leaving tens of thousands of Citi customers holding nearly $20 billion of these illiquid securities for an indefinite period of time. The conduct underlying the proposed charges stems from Citi's marketing of ARS to many of its customers as highly liquid investments, including as money market investments. The liquidity of these securities, however, was premised on Citi providing support bids for auctions it managed when there was not enough customer demand. When Citi stopped supporting auctions in February 2008, there were widespread auction failures. As a result, thousands of Citi customers were left holding illiquid securities.
Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "Today's agreement in principle provides real relief to investors. In a short period of time, about 38,000 individual, small business, and charitable organization investor accounts will receive nearly $7.5 billion in liquidity, and Citi will begin the process of restoring liquidity to over 2,600 institutional investors who hold approximately $12 billion in auction rate securities. This settlement in principle is an outstanding example of federal and state regulatory cooperation for the benefit of investors and markets."
The terms of the agreement in principle, which are subject to finalization, review and approval by the Commission:
• Citi will be permanently enjoined from violating the provisions of Section 15(c) of the Exchange Act, and Rule 15c1-2 thereunder, which prohibit the use of manipulative or deceptive devices by broker-dealers.
• Citi will liquidate at par all ARS from its retail customers, which include all natural persons, charities, and small businesses, no later than three months from today.
• Citi will make whole any losses sustained by customers who purchased ARS before Feb. 12, 2008, and sold such securities after that date at a loss.
• Citi will use its best efforts to liquidate ARS from its institutional customers by the end of 2009.
• Until Citi actually provides for the liquidation of the securities on the schedule set forth above, Citi will provide no-cost loans to customers that will remain outstanding until the ARS are repurchased, and will reimburse customers for any interest costs incurred under any prior loan programs the firm provided to its ARS customers.
• Citi will not liquidate its own inventory of a particular ARS before it liquidates its customers' holding in that security.
• To the extent that a customer has incurred consequential damages beyond the loss of liquidity in the customer's holdings of ARS (which should be restored pursuant to the settlement terms above), Citi will participate in a special arbitration process that the customer may elect, and that will be overseen by FINRA, whereby Citi will not contest liability for its misrepresentations and omissions concerning the ARS, but may challenge the existence or amount of any consequential damages; the arbitration claim will be heard by a single, non-industry arbitrator.
• This arbitration process will be voluntary on the part of the customer and if a customer elects not to take advantage of these special procedures, a customer may pursue all other arbitration or legal or equitable remedies available through any other administrative or judicial process available to the customer.
• Citi will provide notice to all customers of the settlement terms.
• Citi will establish a telephone assistance line, with appropriate staffing, to respond to questions from customers concerning the terms of the settlement.
• Citi faces the prospect of a financial penalty to the SEC after it has completed its obligations under the settlement agreement. Determinations as to the amount of the penalty, if any, will take into account, among other things, an assessment of whether Citi has satisfactorily completed its obligations under the settlement, and the costs incurred by Citi in meeting those obligations, including penalties incurred and the cost of remediation.
The full text of the SEC Release may be found at: http://www.sec.gov/news/press/2008/2008-168.htm
 August 5, 2008
Michaels, Ward & Rabinovitz LLP is pleased to announce that it has been named a "Go-To Law Firm®" for financial services companies by American Lawyer Media's (ALM) Corporate Counsel® magazine.
Michaels, Ward & Rabinovitz, is honored for providing superior client service that has unequivocally matched the magazine's criteria such as "Firms that handled the most important cases in the previous year," and "Firms used most often."
"Go-To Law Firms®" were identified through research conducted by ALM. Researchers asked general counsel at the world's leading financial services companies which outside law firms they turn to for assistance, and to nominate them for recognition. ALM's research department also investigated and gathered data on financial services company's "Go-To Law Firms®" from various public records resources including court dockets and securities filings, as well as legal and business publications, including The American Lawyer.® Michaels, Ward & Rabinovitz thanks its clients for nominating them for this important honor.
July 2008
July 31, 2008 Massachusetts Secretary of State William Galvin filed a complaint against Merrill Lynch
Massachusetts Secretary of State William Galvin filed a complaint against Merrill Lynch today alleging that the firm defrauded thousands of customers who bought auction-rate securities. Similar to a complaint Galvin filed against UBS in June, the 80-page action is based on dozens of internal e-mail messages sent by Merrill executives. Galvin demanded that Merrill buy back all its customers' securities at face value and pay an unspecified fine. The complaint says the charges spring from Merrill "creating and implementing a sales and marketing scheme which significantly misstated not only the nature of the auction-rate securities, but also the overall stability of the auction market, resulting in thousands of investors being abandoned with illiquid investments." A full copy of the complaint against Merrill can be found here: http://www.sec.state.ma.us/sct/sctml2/ml_complaint.pdf
July 2008
On Wall Street Magazine "Breaking Free"
On Wall Street Magazine's July Cover story, "Breaking Free", addresses the various potential problems facing registered representatives leaving brokerage firms to go independent. Michaels, Ward & Rabinovitz Partner Pete Michaels is quoted throughout the article. More...
June 2008
The Litigious Times
 The Litigious Times, a securities industry newsletter, recently published, ADV Disclosures – When to Disclose your Broker-Dealer as a Financial Industry Affiliate, written by Derek Anderson, Managing Partner of the Michaels, Ward & Rabinovitz, LLP Colorado office.
May 2008
Michaels, Ward & Rabinovitz announces their new Blog
In order to better serve our clients and keep them aware of new developments in securities law, Michaels, Ward & Rabinovitz, LLP maintains a blog at www.securitieslaw.biz
April 2008
Michaels, Ward and Rabinovitz Partner Speaks at Broker-Dealer Best Practices Forum
On April 17, 2008, Derek C. Anderson, the managing partner of Michaels, Ward & Rabinovitz, LLP’s Boulder CO office, spoke at a best practices forum sponsored by Harrison Douglas, Inc. for its registered representatives and investment advisor representatives. Harrison Douglas is a Denver based national independent broker-dealer. Mr. Anderson spoke on topics ranging from fiduciary duties in the marketplace to the recent ruling in Financial Planning Association v. Securities Exchange Commission wherein the federal Court of Appeals for the District of Columbia struck down the “Merrill Lynch Rule.” As a result, registered representatives selling fee based advisory programs will be subject to the legal constraints of the Investment Advisory Act.
April 2008
Treasury Secretary Paulson Announces Financial Regulation Overhaul
On March 31, 2008 Treasury Secretary Henry Paulson outlined the details of a broad blueprint to significantly change the financial regulatory landscape. The Proposal would, among other things, shift many regulatory powers to the Federal Reserve from other agencies. Initial reaction from state securities regulators has been negative with Massachusetts Secretary of the Commonwealth William F. Galvin calling the Proposal a “disastrous backward step that would put the investor in jeopardy.” You will find various important links concerning this historic overhaul plan below. These are provided courtesy of SIFMA.
Link to Treasury’s fact sheet on the plan
http://www.treas.gov/press/releases/reports/Fact_Sheet_03.31.08.pdf
Link to the Blueprint’s executive summary
http://www.sifma.org/regulatory/pdf/Paulson-BlueprintExec-summary.pdf
Link to the Blueprint
http://www.sifma.org/regulatory/pdf/Modernized-Financial-Reg-Structure-Blueprint.pdf
Link to Secretary Paulson’s speech
http://www.treas.gov/press/releases/hp897.htm
March 2008
Dan Rabinovitz To Teach National Institute of Trial Advocacy’s Midwestern Regional Program
For the seventh year in a row, Daniel M. Rabinovitz has been invited to teach at the National Institute of Trial Advocacy’s Midwestern Regional Program, held in Chicago, Illinois. Mr. Rabinovitz will be a member of the faculty teaching young lawyers from across the nation all aspects of the Criminal and Civil trial process, including Opening Statements, Closing Arguments and the preparation of Direct and Cross-Examination of Expert Witnesses. The program culminates with a full day jury trial held in Chicago’s Richard J. Daley Plaza.
February 2008
Michaels, Ward & Rabinovitz is pleased to announce that Cliff Anderson has joined the firm.
February 25- Mr. Cliff Anderson has joined the firm and will focus his practice primarily on securities litigation.
February 2008
The Massachusetts Securities Division (MSD) recently filed an action against Merrill Lynch
The Massachusetts Securities Division (MSD) recently filed an action against Merrill Lynch, alleging that the brokerage firm defrauded the City of Springfield Massachusetts in connection with Springfield's investment of approximately $14 million of the city's budget surplus into three so-called collateralized debt obligations (CDOs). CDOs are pools of debt securities backed by mortgage loans. According to the Complaint filed by the MSD, the Merrill brokers did not communicate to the city that they had invested the money in CDOs, never explained the risks of the investments and never produced documentation regarding the risk factors. Interestingly, the day before the MSD filed this action, the Massachusetts Attorney General, Martha Coakley, announced that Merrill had reimbursed the city for all of its losses in the investments. Merrill terminated the registered representatives who sold the CDOs, Manuel Choy and Carl J. Kipper, after the AG-brokered settlement and the MSD suit. The MSD complaint may be found at: http://www.sec.state.ma.us/sct/sctml/mlidx.htm
February 2008
More CDO Fallout in Massachusetts
According to a report published in the Boston Globe, the Massachusetts Securities Division (“MSD”) has issued subpoenas to two municipal bond insurers, seeking information on how much the firms disclosed to cities and towns about their exposure to mortage-related investments. The MSD sent the subpoenas to Ambac Financial Group Inc. and MBIA Inc., both based in New York state, seeking lists of all Massachusetts public bonds that are guaranteed by those two firms. According the article, Secretary of State William Galvin said “This office wants to know when and if MBIA and Ambac disclosed to bond issuers-the cities, towns, districts and other public authorities-that their financial condition as an insurer was being severely impacted as a result of their involvement with [ collateralized debt obligations (CDOs)]”.
January 2008
Michaels, Ward & Rabinovitz is pleased to announce that Brady Hermann has joined the firm.
January 7 - Mr. Brady Hermann, formerly an associate at a general practice law firm in Boston, Massachusetts has joined the firm and will focus his practice primarily on securities litigation.
December 2007
The Litigious Times
December 2007 - The Litigious Times, a securities industry newsletter, recently published, Retiring Boomers, Issues to Avoid for FA's By Derek Anderson, Managing Partner of Michaels, Ward & Rabinovitz Colorado office.
November 2007
Michaels, Ward & Rabinovitz, LLP Attorneys Receive Recognition
November 2007 - Two partners from Michaels, Ward & Rabinovitz, LLP were recognized by Law & Politics and Boston Magazine as 2007 "Super Lawyers". Pete S. Michaels was selected in Securities Litigation and Daniel M Rabinovitz was noted for his work in the Business Litigation field.
|
