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More Investment Advisory Firms Face Charges for Spreading Misleading Information

December 19, 2016 Blog

In August, we announced that we were investigating 13 investment management firms that had been penalized by the Securities and Exchange Commission (SEC) for publishing false and misleading advertising. We followed that announcement in October with an update further discussing the firms’ penalized activities.

Now, the SEC has announced charges against two additional advisory firms in unrelated actions, both of which involve allegations of spreading false information to individual investors.

Credit Suisse to Pay $90 Million to Settle Misrepresentation Claims

Following an SEC investigation, Credit Suisse, one of the world’s leading financial services firms, agreed to pay $90 million and admit wrongdoing in connection with a scheme that the SEC says, “deprived investors of the opportunity to fairly judge the firm’s success in attracting new money.” The SEC had accused certain senior officials at Credit Suisse of pressuring employees to employ a “results-driven” performance model that focused on finding a way to artificially reach targets while investors were led to believe that the firm was using a legitimate performance metric.

Specifically, in its public disclosures, Credit Suisse claimed to be using a metric that focused on “individually assessing assets based on each client’s intentions and objectives.” In reality, however, Credit Suisse was using an undisclosed approach that “reverse-engineered” results in order to enhance its apparent market position. Individuals who invested with Credit Suisse in reliance on this misleading information may be able to take legal action in order to recover any resulting investment losses.

Investment Firm Charged With Misleading Clients Regarding Fees

The SEC has charged investment advisory firm Oracle Investment Research with misrepresenting the management fees billed to its clients along with other securities law violations. According to a press release, the firm’s manager, Laurence Balter, “told clients invested in his affiliated mutual fund they would not pay both advisory fees and fund management fees, yet he charged both fees anyway.” Along with the other violations, which included “cherry-picking” profitable trades for his own account while allocating unprofitable trades to his clients, the SEC alleges that Mr. Balter collected more than $500,000 in improper profits.

Of course, these are just two examples of the countless frauds perpetrated against individual investors. Fraudulent brokerage and advisory practices cost investors billions of dollars every year, and too often, individual investors attempt to absorb these losses without taking action to protect their rights. There are procedures available to recover fraudulent investment losses; and, with experienced legal representation, harmed investors can often secure compensation while holding unscrupulous firms and individuals accountable.

Schedule a Free Consultation at Zamansky LLC

If you have suffered investment losses and would like to speak with a stock fraud lawyer about your rights, we encourage you to contact us for a free, no-obligation consultation. Zamansky LLC’s attorneys have decades of experience representing individual investors and have recovered millions in compensation for their clients’ fraud-related losses. For more information about pursuing a claim based upon your receipt of false or misleading information, call (212) 742-1414 or inquire online today.