Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Monday, February 28, 2011

FINRA Won't Discipline Schwab for ARS Sales

On February 11, FINRA notified Charles Schwab that it has decided not to bring a disciplinary action against it related to sales of auction rate securities.  Schwab previously reported that in November 2009 FINRA issued a Wells notice in connection with the ARS.  A complaint filed by the New York AG around the same time is still pending against the firm.  InvNews, Finra backs down, won't discipline Schwab over ARS sales

http://lawprofessors.typepad.com/securities/2011/02/finra-wont-discipline-schwab-for-ars-sales.html

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Comments

The same fraud was committed by all of these banks, using the same representations of a security that was peddled as cash, but was in fact long-term or perpetual bonds.

The financial industry should have been forced to refinance the entire $336 billion market. Instead, individual investors - risk-averse, many of them elderly, all of them misinformed -- have been stuck, some more than three years, with "cash" their investment bank will not return as promised.
Finra is a joke, but I'm not laughing.

Posted by: Kathy | Mar 1, 2011 3:47:40 PM

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