Holland & Hart Securities Blog

HOW TO ACHIEVE A LENIENT SETTLEMENT WITH THE SEC

A recent settlement in an SEC case against an attorney accused of engaging in an illegal scheme to “pump and dump” the shares of a microcap company demonstrates the value of persistence and good lawyering in litigation against the agency. In an earlier article posted on this blog, I wrote that SEC v. Packetport.com, Inc., Civ. No. 3:05-CV-1747 (D. Conn.) (Nov. 16, 2005), a civil injunctive action filed in the U.S. District Court, was consistent with previously announced factors that the SEC stated it would apply when considering when to bring charges against lawyers. 

Brookstreet Securities Collapse: Where Were the Regulators?

The recent collapse of Brookstreet Securities raises serious questions about the efficacy of  regulation by the SEC, the NASD and state regulators.  In late June, Brookstreet fell below net capital requirements and shut it doors after its clearing firm, National Financial Services (“NFS”) suddenly wrote down the price of extremely risky and illiquid collateralized mortgage obligations (“CMO’s”) that Brookstreet had sold to its retail customers.  Brookstreet’s headquarters in Orange County, California provides an ironic backdrop for this sordid story, since Orange County itself lost millions buying CMO’s in the early 1990’s. 

Is Your Qualified Intermediary a Thief?

           Someone once asked Jesse James why he robbed banks, to which he responded “because that’s where the money is!”  Recent events demonstrate that, like James, certain qualified intermediaries involved in so-called “1031 Exchanges” are unable to resist the temptation to rob investors.  The activities of these modern-day bank robbers are facilitated by the unregulated nature of the qualified intermediary industry.