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June 2013 Archives

Supreme Court Strikes Down Defense of Marraige Act

Yesterday, the Supreme Court struck down the 1996 Defense of Marriage Act (DOMA) in US. v. Windsor. Edie Windsor and Thea Spyer were legally married in Canada and although the state of New York recognized their marriage, the federal government did not under DOMA. When Spyer died, Windsor had to pay $353,053 in Federal estate taxes as a result of the IRS' disallowance of the marital deduction. Supreme Court affirmed the Second Circuit's ruling that Section 3 of the DOMA violates the Fifth Amendment's guarantee of equal protection of the laws as applied to persons of the same sex who are legally married under the laws of their State.

StateTrust Investment Inc. Fined for Unfair Bond Prices

StateTrust Investment Inc. was fined by FINRA for unfairly pricing customer bond transactions. FINRA alleged that from 2007 to 2010, 563 bond transactions had been unreasonably marked up or marked down. To remedy this wrongdoing, FINRA has required StateTrust to pay over $1 million in fines as well as $353,000 in restitution to its clients. According to the Wall Street Journal, Jose Turnes, the head trader for StateTrust has been suspended and been fined $75,00. Just last year, Jeffrey Cimbal, StateTrust's chief compliance officer, was fined "$20,000 and suspended him for five months in a principal capacity for failing to supervise Mr. Turnes." The firm and its employees neither admitted nor denied FINRA's charges.

Merrill Lynch and Wells Fargo Fined

The Financial Industry Regulatory Authority (FINRA) fined both Wells Fargo and Merrill Lynch $2.15 million for the unsuitable recommendation and sale of mutual funds known as "floating-rate bank loan funds." Not only were Merrill Lynch and Wells Fargo ordered to pay a hefty fine, FINRA also ordered the two firms to pay over three million dollars back to some of the customers that were solicited to purchase the floating-rate bank funds.


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