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February 2013 Archives

FINRA Ruling on Class Action Waivers

A FINRA arbitration panel has dismissed an action by FINRA regulators to prohibit Charles Schwab Corp. from requiring customers to sign off on agreements which prohibit participation in judicial class actions. While the arbitration panel did find that Charles Schwab Corp.'s use of such language violated FINRA rules, the panel decided that FINRA may not enforce its rules because they are in conflict with the Federal Arbitration Act. This decision may encourage other brokerage firms to utilize similar language further limiting a customer's right to seek relief from the courts system . Hopefully, FINRA regulators will appeal the panel's decision to FINRA's National Adjudicatory Council.

What Happens to Your Social Media Presence After Your Death?

The legal world is struggling to keep pace with the ever changing world of social media. Maryland is one of several states, such as Virginia and North Dakota, which has introduced legislation addressing a decedent's digital assets such as Facebook, Twitter and email accounts. Senate Bill 29 authorizes a personal representative to take control of, continue, or terminate an account of the decedent on a social networking website, microblogging or short message service website, or electronic mail service website. Under Senate Bill 29, a personal representative's ability to control or terminate these accounts can be limited by will.

After settlement negotiations fail, the U.S. Government files suit against Standard & Poor's

The United States attorneygeneral, Eric H. Holder, Jr., joined by attorneys general from 16 states, brought suit against Standard & Poor's (S&P) and its parent company, the McGraw-Hill Companies, for "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud". The government's claim seeks $5 billion in penalties to cover losses to state pension funds and federally insured banks and credit unions.

Marital Deduction for Same-Sex Couples

Although voters in Maryland and other states approved a referendum legalizing same-sex marriage last November, same sex couples' future ability to take advantage of the marital deduction under Federal estate tax law is unclear.

FINRA files for Cease-and-Desist Order Against Westor Capital Group for Misappropriation and Misuse of Customer Funds and Securities

On January 23, 2013, the Financial Industry Regulatory Authority (FINRA) filed a temporary cease-and-desist order against Westor Capital Group (Westor) and its President, Richard Hans Bach, to immediately stop the further misappropriation and misuse of customer funds and securities. In addition to the cease-and desist order, FINRA has filed a complaint alleging the two failed to allow customers to withdraw account balances or deliver securities, misusing customer securities, failing to maintain physical possession or control of securities, and for operating an unapproved self-clearing business.


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