Frequently Asked Questions



Protocol for Broker Recruiting

The Protocol for Broker Recruiting ("Protocol") is a letter agreement between several broker-dealers designed to facilitate the orderly transition by a Registered Representative ("RR") between firms. If the departing RR follows the terms and conditions of the Protocol, neither the RR nor the firm that he joins will be exposed to an injunction for violation on a restrictive covenant such as a non-compete or for a monetary award arising from the removal of client information or the solicitation of clients by the RR. The Protocol's benefit to the broker-dealer is that it saves substantial time and money; the benefit to the RR is clarity as to the RR's rights and responsibilities in soliciting and transferring his/her clients.

The Protocol delineates the client information a broker can take to his/her new firm. The RR can only take the following account information: client's name, address, phone number, e-mail address and the title of the client that the RR services while at the departing firm. The RR cannot deviate from this list; to do so would constitute a Protocol breach which would enable the departing firm to enforce its restrictive covenants as described in its employment agreement with the RR and further seek damages for lost profits from the RR and the hiring firm. The Protocol further requires the RR to resign by delivering a writing to the local branch management and to leave a copy of the client list the broker is taking which must also include the account numbers for the clients serviced by the RR.

The Protocol has additional requirements and restrictions that a RR should carefully review and obtain proper legal assistance prior to relocating to a new firm. This includes in part compliance with SEC regulation SP. The RR under the Protocol can also obtain a copy of the client's last statement from the departing firm. This often obviates the need for the client to incur the time and cost of providing the RR with his/her statements at the new firm. The client will only need to sign an ACAT. The RR should note however that he/she cannot take any clients or former broker-dealer client information in the form of paper or electronic documentation other than the client list.

The Protocol requires both the broker-dealer and the RR to proceed in good faith. The Protocol process enables a RR to transition both himself and his clients to the new firm without the angst or business loss associated with litigation. However, the Protocol restrictions must be followed; moreover, there are multiple exceptions to the Protocol including, but not limited to, "raids" and joint production agreements, each of which must be reviewed with counsel familiar with the Protocol, applicable regulations and industry practices.

For more on the Protocol and your rights and responsibilities, contact Attorney Andre Perron at 941-827-2228.

BACK TO TOP



Probate

Elder Abuse Defined

Federal definitions of elder abuse, neglect and exploitation appeared for the first time in the 1987 Amendments to the Older Americans Act. These definitions were provided in the law only as guidelines for identifying the problems and not for enforcement purposes.

Definitions in state law vary considerably from state to state in terms of what constitutes abuse, neglect or exploitation of the elderly. Researchers also have used varying definitions to describe and study the problem.

Broadly defined, however, there are three basic categories of elder abuse:

Domestic elder abuse
Institutional elder abuse
Self-neglect or self-abuse

While state definitions may vary, in most states, definitions of elder abuse generally fall within these three categories.

Domestic elder abuse generally refers to any of several forms of maltreatment of an older person by someone who has a special relationship with the elder (a spouse, a sibling, a child, a friend or a caregiver), that occur in the elder's home, or in the home of a caregiver.

Financial or material exploitation

Financial or material exploitation is defined as the illegal or improper use of an elder's funds, property or assets. Examples include, but are not limited to, misusing or stealing an order person's money or possessions; coercing or deceiving an older person into signing formal documents such as contracts, trusts, wills; cashing an elderly person's checks without authorization; forging an older person's signature; the improper use of conservatorship, guardianship or power of attorney. Warning signs of financial or material exploitation include:

•  sudden changes in bank accounts or banking practice, including unexplained withdrawals of large
    sums of money;
•  the inclusion of additional names on an elder's bank accounts;
•  unauthorized withdrawal of the elder's funds using the elder's ATM card;
•  abrupt changes in wills, POA, trusts or other financial documents;
•  unexplained disappearance of funds or valuable possessions;
•  sudden changes in titles/deeds of property;
•  unexplained transfer of assets to a family member or someone outside the family.

Emotional or psychological abuse

Emotional or psychological abuse is defined as the infliction or anguish or distress through verbal or nonverbal acts. This form of abuse includes, but is not limited to, verbal assaults, threats, coercion, intimidation, humiliation and harassment. Other abuses include isolating an elderly person from his/her family, friends or regular activities; giving an order person the silent treatment; and enforced social isolation. Warning signs or emotional abuse include erratic or irrational behavior by the victim.

Verbal forms of emotional elder abuse include:

•  Intimidating and coercion through yelling or threats;
•  Humiliation and ridicule;
•  Habitual blaming or scapegoating.

Nonverbal psychological elder abuse can take the form of

•  Ignoring the elderly person;
•  Isolating an elder from friends or activities;
•  Terrorizing or menacing the elderly person;

Abandonment

Abandonment is defined as the desertion of an elderly person by an individual who has assumed responsibility for providing care for an elder, or by a person with physical custody of an elder.

Neglect

Unusual weight loss, malnutrition, dehydration and untreated physical problems.

BACK TO TOP



Expungements

The Central Registration Depository (CRD) maintains the qualifications, employment and disclosure histories of approximately 5,000 broker-dealers and approximately 660,000 registered security employees. This system contains broker-dealer information filed on Form BD (the application for a broker-dealer's registration) and Form BDW (the application used to request withdrawal of the broker-dealer's registration). The CRD also contains information about registered persons filed on Form U4 (the Uniform Application for Securities Industry Registration or Transfer) and Form U5, the Uniform Termination Notice for Security Industry Registration).

Firms and their registered persons are required to report certain criminal charges and convictions, regulatory actions, bankruptcies, certain customer complaints and customer-initiated arbitration claims to the CRD. When a registered person is named as a respondent on a customer-initiated arbitration proceeding, the claim is reported on Form U4, and once reported, is recorded on the registered person's CRD record.

In the event the claim is denied by the arbitration panel, the registered person may seek to have any reference to the arbitration removed from hisher CRD -this procedure is known as expungement. It is important to remove a frivolous claim from a CRD because the CRD is a public record and will impact the registered person's reputation and ability to do business. Expungement proceedings are governed by FINRA Rule 2080. In order to expunge a CRD, an arbitration panel must make the following specific findings

•  The claim, allegation or information is factually impossible or clearly erroneous;
•  The registered person was not involved in the alleged investment-related sales practice, violation,
    forgery, theft, misappropriation or conversion of funds; or,
•  The claim, allegation or information is false.

This finding by an arbitration panel must be in writing after an evidentiary hearing. The standards for expungement apply only to cases that involve customer dispute information.

Once the panel issues the expungement order, then the registered person is required to file a lawsuit in a court of competent jurisdiction to obtain a court order entering the arbitration order as a final judgment of the court. This proceeding requires knowledge of both FINRA regulation's, court rules and applicable statutes. You should note that the fact that a person prevailed in an arbitration case is not, in and of itself, an appropriate ground for expunging information about the proceeding from the CRD system. To accomplish this, there first must be a finding by the arbitration or the three points referenced above followed by a court of competent jurisdiction confirming the award.

For more on expungement, its requirements and your rights, contact Andre Perron at 941-827-2228.

BACK TO TOP



Crowdfunding

In early 2012 the Jump Start Our Business Startups (JOBS) Act was signed into law. The JOBS Act amends sections of the Securities Act of 1933 as amended (the Act) to allow for "crowdfunding" and further eases restrictions on advertising and solicitation under Reg. D of the Act.

The crowdfunding exception will enable issuers for startups and other small companies to contact large numbers of potential purchasers that are otherwise unapproachable under current securities laws because of the existing prohibitions on general solicitation and the requirements that investors be "accredited investors" pursuant to Reg. D of the Act. Crowdfunding is the product of and reaction to the social networking environment.

The crowdfunding exception has limitations as to the amount of the offering; the aggregate amount of securities sold by the issuer; and the aggregate amount sold to any investor. Crowdfunding further requires the transaction to be conducted through a broker or funding portal.

The primary concern to an investor is that the JOBS Act lifts the bans on general solicitation and advertising for sales affected under Rule 506 of Reg. D. A company may be able to now solicit under Rule 506 of the JOBS Act through the internet, but also on the radio, television, at sporting events, etc. The relaxation of the regulations means that investors can be targeted, many of whom are much less savvy and experienced than an accredited investor under Reg. D. Moreover, the advertising can be more aggressive, and possibly misleading. Further as the investment will likely involve a startup, early stage and other small company, it will be highly speculative and there is a risk the entire investment could be lost. A secondary concern is that the crowdfunding advertising could be a medium for a Ponzi Scheme or similar scam.

As an investor you should fully investigate any crowdfunding offer. In addition to understanding the nature and risk of the investment you should further understand your legal rights under the JOBS Act. In the event you believe you are the victim of fraud concerning a crowdfunding investment, you should contact legal counsel as you have certain rights under the Act. Andre R. Perron is a certified Business Litigator who concentrates in investment fraud. Contact him at 941-750-9760 for a consultation today!.

BACK TO TOP



EB-5 Fraud

The EB-5 program enables entrepreneurs, their spouses and children under twenty-one, to apply for a green card if they:

•  Make the necessary investment in a commercial enterprise in the United States; and
•  Plan to create or preserve ten permanent, full-time jobs for qualified U.S workers.

Many looking to apply for permanent residence in the U.S have made the necessary investments into numerous businesses and ventures. This has, unfortunately, lead to many instances of investment fraud, ranging from misleading financial statements, negligent advice to outright deceit.

Andre R. Perron, certified by the Florida Bar as a business litigation specialist, has over thirty years of experience. He and his litigation team prosecute EB-5 investment fraud throughout the Florida area.

EB-5 negligence or fraud can be devastating for those involved, and many cases have cost the victims not only their investments, but their chance of permanent residency for themselves and their family, as well as the workers involved with the investment.

When it comes to protecting your investment and legacy, you want someone with not only years of practice behind them, but someone who knows the EB-5 fraud and the multiple schemes used to destroy investors lives and livelihood. Don’t let yourself feel defenseless in the face of EB-5 fraud - let Mr. Perron put his experience into your corner.

Contact attorney Andre Perron today by calling 941-827-2228 to schedule a consultation and discuss your case, or email him at: aperron@barneswalker.com. All consultations and documents related to your case will always be kept strictly confidential.

BACK TO TOP



Real Estate Investment Trust (REIT) Fraud

REIT stands for real estate investment trust, and is typically is sold like a stock though it is classified as a security. Investors tend to put money towards REITs to invest in larger scale real estate by purchasing shares from a corporation that manages the real estate property. It is a great opportunity for the average investor. However, it has also enabled many investors to be exposed to REIT fraud and investment scams.

Some pitch REITs as a way to get into real estate investment easily. Scammers and fraudsters use this pitch to trick people into investing in non-traded REITs by neglecting to inform them of the volatility of the stock market. These types of investments are long-term, and not suitable for many investors, especially retirees. There is also the risk factor of fees that these investments can rack up. This kind of negligent investment advice and REIT fraud can lead to a loss of investments and even your livelihood. If you’ve fallen victim to negligent advice from a broker or investment fraud, we can help.

Attorney Andre Perron represents individuals and businesses involved in REIT fraud in Sarasota, Bradenton and throughout Southwest Florida. Having been certified as an expert in business litigation by the Florida Bar, and with more than 30 years of experience, he brings a high level of judgment and practical skill to help you protect your REIT investments.

For experienced investment law and representation, contact Andre Perron by calling 941-827-2228 to schedule a consultation. All consultations and documents related to your case will always be kept strictly confidential.

BACK TO TOP



Annuity Fraud

Investing in annuities can be a rewarding, and dangerous, experience. The industry is regulated by a number of state and federal agencies, but incidents can still occur in which unprepared individuals, new investors and seniors are scammed into buying unsuitable products.

Unethical insurance agents prey on these groups, as well as a number of people who enter the market looking to make investments into annuity and retirement. While they are sometimes caught by law officials, many still lose hundreds of thousands of dollars on investment fraud and annuity fraud each year. Any investor, including elderly family members, can lose their livelihoods to these scams. If you have, it is not too late to get was is owed to you.

Attorney Andre Perron represents individuals and businesses involved in annuity fraud in Sarasota, Bradenton and throughout Southwest Florida. Having been certified as an expert in business litigation by the Florida Bar, and with more than 30 years of experience, he brings a high level of judgment and practical skill to help you protect your annuity investments.

For experienced investment law and representation, contact Andre Perron by calling 941-827-2228 to schedule a consultation. All consultations and documents related to your case will always be kept strictly confidential.

BACK TO TOP



Leveraged ETF Fraud

Leveraged Exchange Traded Funds, or ETFs, have grown exceptionally popular in the last several years. Stockbrokers and investors both often attribute leveraged ETFs to being cheap, easy to purchase and something that they can easily make a lot of money with. However, while a leveraged ETF may work for some, it has come to light that ETF fraud has caused US consumers to lose massive amounts of money.

Average consumers, retirees and senior citizens have especially been effected by leveraged ETFs, ETF fraud, and poor advising from their investors or stockbrokers. ETFs are inherently risky, and poor advice or the high volatility of ETFs can cause those unaware of the risks to lose their very livelihood.

If you've been the victim of leverage ETFs, ETF fraud or have lost money on ETFs due to a negligent stockbroker, contact Andre Perron by calling 941-827-2228 to schedule a consultation. All consultations and documents related to your case will always be kept strictly confidential.

BACK TO TOP