I wish it was as simple as stating "yes" or "no". Unfortunately, there have been so many lawsuits across the country between buyers and sellers regarding the "proper" disclosure, that there is now (for the most part) no excuse for Sellers' not knowing the proper standard.

The standard is a reasonable common sense standard. If the buyer can see the defect when they are inspecting your home, then you do not need to "tell them" (disclose) about the defect since it is readily observable. This, however, is not what results in lawsuits by the buyers. It’s the defects that the buyers can’t see,and later find out 6 months after moving into the home, that starts the lawsuit

What does this mean? As the seller, you are required to tell the buyers of defects that exist within your home, but that the buyers cannot see when they walk through your home. Prime examples are leaky roof, termites, or foundational cracks. As a seller if you know you have these problems or similar problems then you are required by law to tell the buyer so the buyer can make an informed decision on whether he/she wishes to still purchase the home.

Well, I know what you are asking now. What if I didn’t know? As mentioned before, this is a common sense standard so you are not required by law to disclose defects that you didn’t know about either. I still know what you are thinking now. As seller, I can probably identify 100 small little defects, i.e, chipped plaster in a small corner of my bedroom, stains along my floors in the kitchen or maybe a kitchen cabinet doesn’t properly close all the way. Remember, this is a common sense standard so only huge defects (material) that are not readily observable need to be disclosed. If the buyers would change their mind and not buy your home over the "defect", chances are the defect is material.

What this all boils down to is that as sellers you should put every known defect in your home on your seller disclosure to avoid any future liability.

So to conclude, just remember, when in doubt disclose in writing and you will be protected.

For more information on this and other real estate matters, contact one of our West Palm Beach lawyers at LaBovick Law Group.

The housing meltdown has sent shock waves throughout the United States, with foreclosures reaching over 4 million. In an effort to help current homeowners that are on the brink of losing their home, the government initiated a program whereby homeowners can receive a free fraud review of their foreclosure to make sure there are no issues.

It was recently reported by the Palm Beach Post that few homeowners have taken advantage of the free foreclosure fraud review. Specifically, less than 3% of the total eligible for the fraud review have taken advantage.

It was reported that representatives have sent out over 4.3 million notices to those that qualify for the review, with only 121,725 people responding thus far. The initial deadline of April 30, 2012 has been pushed back to July 31, 2012, due to the low response.
Some of the main concerns with the program include:

1. A homeowner must have been in some process of foreclosure in 2009 and 2010 to be eligible. But it's only for a two-year period and a lot of the subprime loans went into foreclosure before that.
2. Concerns about whether homeowners would have to sign away rights to future claims if they accept an award for financial harm found during the foreclosure review.

One of the main reasons there has been such a low response is that many homeowners treat the mailing as another piece of junk mail. Homeowners receive several mailers regarding foreclosure assistance and it is believed by many that this correspondence blends in with the rest. Others believe homeowners think it is a scam.

I tell my clients to apply for the review, but only a handful have alerted me to the letters.

They get a lot of advertisements and there are so many scams out there that they might think it's just a scam. It's a bit of a hazy program.

Have you received a free foreclosure review mailer? Have you gone through the process? Leave a comment below discussing you experience.

Nobody I know likes to be ripped off. I am sure that you would not enjoy it as well. It is unfortunate that this occurs, but is a reality that we all must face. In an effort to inoculate the public against being ripped off, each year the Internal Revenue Service provides a list of the twelve biggest tax frauds for that year. Many of these scams are simple in design and implementation, and well known methods of taking advantage of vulnerable people. These acts occur at all times of the year, but most of them come to fruition during tax season.

So as the tax deadline of April 15 quickly approaches, we want you to be aware of what is lurking out there. Most of the scams are easy to spot. Just remember a few cliches and you will stay safe.

First cliche – There are no free lunches!

Second cliche - If it sounds “too good to be true”, it is!

IRS List of Top Tax Ripoffs for 2012

1. Identity Theft
2. Phishing
3. Tax Preparer Fraud
4. Hiding Income Offshore
5. Free Money from the IRS
6. False or Inflated Income or Expenses
7. False Form 1099 Refund Claims]
8. Frivolous Arguments
9. Zero Wage Claims
10. Abusing Charitable Deductions
11. Disguised Corporate Ownership
12. Misusing Trusts

Let’s explore in more detail the top three:

Topping the list again is IDENTITY THEFT

Identity theft is the biggest problem in the electronic age. The internet and its electronic community have rushed forward, ahead of all methods of control, and create a “Wild West” atmosphere. The thing about the United States that makes us great is our respect for the rule of law. However, that is not true for the Internet. The controls, privacy protections, and rule of law are just not moving as fast as the Internet community is moving forward. False tax returns are one common way thieves take advantage of both the government and the victims. The IRS has stepped up efforts to control Identity Theft tax rip offs but because ID thieves use real social security numbers and easy to find personal information (see Face Book, Google +, and Twitter) it is a hard job. If you get a notice that more than one tax return was filed in your name, make sure you report it immediately. The IRS has create a significant system to catch ID theft on tax returns and last year they saved over $1,400,000,000 in taxpayer refunds, but the thieves are smart and the schemes are getting more and more complex. If you are suspect that your ID was stolen you need to contact the IRS ID Protection Unit at www.IRS.gov/identitytheft.

Fishing! No, wrong, sorry: Phishing!

Phishing is when ID thieves lure victims into giving valuable identity information to the ID thief. This is typically carried out using email requests or setting up websites that look and feel like a legitimate site. Because there is really no difference between a “Real Website” and a “Fraudulent Website” it is easy to mistake them. Once the ID thief has your information, you are likely to get ripped off.

Here is a KEY POINT with respect to the IRS. The IRS does not use email to collect, or even request personal information from taxpayers. They certainly do not use FaceBook, Twitter or any other social media to contact or collect information. Do not trust an email, FaceBook contact, or any electronic contact from the IRS. If you do get an email from the IRS, or even the EFTPS – which is the Electronic Federal Tax Payment System, that looks legitimate but was unsolicited, you need to report that to the IRS through their specially designed Phishing unit at phishing@irs.gov.

Preparer Fraud

Almost nobody understands the tax code. Certainly those simple to fill in return forms are a nightmare to get right. So, many of us use accountants, CPA's, or tax attorneys to help us at the end of the tax year. But the expense of paying for a professional is quite burdensome for most people, so they either do it themselves, or look for a more economical option. The “Economical” route has created a space in the market for fraudulent tax preparers. These thieves will take money out of their clients’ refund, or charge unfair fees to prepare the return. They promote their service with unrealistic promises of guaranteed, overinflated refunds. Further, these thieves then have access to your personal information and can steal from you twice!

Here are some good standards to look for when choosing a Tax Preparer:

• Every paid “tax preparer” must get a “Preparer Tax Identification Number” (PTIN) from the IRS. This number must be placed on every prepared tax return. If your tax preparer does not have a PTIN then you should not sign the return.
• Every Preparer should give you a free copy of the return. If you are not given a copy of your tax return there may be a problem. If your Preparer is promising to get you an incredible or unusual amount on your return, I would be very wary.
• Tax preparers should be working on a set fee. They should not be on a contingency or commission basis and you should never have to pay the preparer from your refund.
• Finally, never allow a preparer to convince you to put false information on a tax return. That means you can never put in false income or false credits. If you do you are subjecting yourself to double jeopardy, because the preparer will have you and the IRS will also not be happy with your false information.

As a firm that concentrates on IRS Tax Fraud including Qui Tam and Whistleblower Issues we want you to beware of tax season scams! If you believe you are the victim of a scam, you need to report it as soon as possible. The IRS Criminal Division and the Dept. of Justice take online, telephone and in person scams seriously. If you have questions or have information about a tax fraud where more than $2,000,000 is at stake, call our office to report the fraud. Remember, when reporting tax fraud you must be first in line, you must have convincing information, and you must secure your claim to get paid the “Relator’s Share”. Call our office for a free consultation: LaBovick Law Group at 561-625-8400, or email info@labovick.com.

U.S. District Judge Richard Kyle sentenced Minnesota businessman Tom Petters to 50 years in prison for orchestrating a Ponzi scheme estimated at $3.7 billion. Counted among the victims of his scheme were missionaries, pastors and retirees. The sentence comes after a jury found Petters guilty on 20 counts of money laundering, wire fraud, conspiracy and mail fraud in December.

The Ponzi scheme involved the fake purchase of electronics by Petters Company Inc., which would then “resell” the supposed merchandise to discount retailers for a profit. Petters and his associates used bogus bank records and fake purchase orders to swindle investors out of $3.7 billion.

Judge Kyle stated to a packed courtroom that included Petters' relatives as well as some victims, "Mr. Petters was captain of the ship." The Judge did not believe that Petters, a former owner of Polaroid and Sun Country Airlines, was unaware of the fraud at Petters Group Worldwide.

At his sentencing hearing, Petters said, “Every day, I’m filled with pain and anguish for all the lives that have been destroyed and touched by this episode.” Petters, a successful entrepreneur and former owner of Sun County Airlines and Polaroid, apologized to his family, friends and others hurt by his actions, but never admitted guilt.

At 52 years old, Petters will likely spend the remainder of his life behind bars.

50-Year Term for Minnesota Man in $3.7 Billion Ponzi Fraud – NY Times Article

Minn.'s Petters Gets 50 Years in $3.7B Fraud Case – ABC News/Money Article

The Financial Industry Regulatory Authority (FINRA) released a 16-page letter announcing that it is issuing its 2010 annual examination priorities, on March 1st. The letter includes information on both new and existing areas of importance to FINRA’s yearly examination program. The letter discusses priority topics from FINRA’s Market Regulation and Member Regulation Departments, and the organization’s Enforcement Department.

The financial decline of 2009 exposed investment frauds “perpetrated by registered and unregistered parties”. As a result, the agency plans to heighten its focus, and to execute regulatory programs that are both rigorous and thorough. The idea is to provide investors with the best possible protection from investment fraud.

Some of the organization’s new developments include:

• The establishment of the Office of Fraud Detection and Market Intelligence in order to provide such services as a heightened review of serious fraud allegations;

• An expansion of BrokerCheck and other disclosure expansions to make it easier for investors to find information about brokers;

• A rule consolidation process designed to create a new consolidated rulebook; and

• The eFOCUS Filing Platform that will allow firms to submit certain reports to FINRA electronically.

FINRA encourages investment providers and investors to use the information in the letter to “gain valuable insights into key FINRA examination and regulatory topics.”

Click on the following link to read the 2010 FINRA Annual Examination Letter.

If you are a Mcfee, Inc, investor, we have good news for you. The Securities and Exchange Commission has announced distribution of approximately $67 million to over 16,000 investors in connection with McAfee, Inc. financial fraud settlements.

The Fair Fund was created after McAfee (formerly Network Associates, Inc.), agreed to pay approximately $50 million in penalties and disgorgement to settle SEC charges in 2006 that it defrauded investors by overstating its revenues and earnings.

Investor questions regarding the distribution can be answered by calling 1-800-893-4359. Information regarding the distribution also can be obtained at McAfeeSECsettlement.com.

As an investor, do you fully understand the power and meaning of your proxy in corporate elections? The Securities and Exchange Commission is taking steps to educate investors on proxy voting and support greater investor participation in corporate elections.

The series of measures include amending the SEC’s e-proxy rules, issuing an Investor Alert, and creating new Internet resources that explain the proxy voting process in plain language.

The Securities Exchange Commission has created a new subsection on the SEC website Spotlight on Proxy Matters.

This new area on the SEC website provides investors educational information on such things as:
New Shareholder Voting Rules, Corporate Elections FAQ, Voting Procedures FAQ, "E-Proxy" or "Notice and Access" and Receiving Proxy Materials FAQ.

According to SEC Chairman Mary L. Schapiro:
"Investor participation in elections at companies they own is critical to effective corporate governance.”

Investors should be aware that last year, the SEC approved a change to the NYSE rule that previously allowed brokers the discretion to vote shares held in customer accounts in an uncontested election of directors without receiving voting instructions from those customers. The new SEC rule only allows brokers to vote those shares in elections at companies if they are instructed by their customers. However, the change does not apply to mutual funds or certain closed end funds.

We encourage investors to make use of the new educational site Proxy Matters and other helpful consumer information provided by the Securities Exchange Commission.

David Brooks, a founder and ex-chief executive officer of DHB Industries (DHB), a contracting company for the U.S. military and other agencies, is accused of looting the company of $185 million. According to a federal prosecutor, Mr. Brooks allegedly used the looted money to fund “lavish” personal expenditures.

Along with Sandra Hatfield, DHB’s former chief operating officer, Mr. Brooks is accused of securities fraud, insider trading, manipulating financial records, and a bevy of additional charges. Brooks and Hatfield reportedly used deceitful techniques to increase the company’s reported earnings and profits substantially.

According to federal prosecutors, Brooks and Hatfield reportedly inflated the value of DHB’s stock by lying about the inventory of supposedly shipped combat vests to the U.S. military. As a result, the duo defrauded the company for a combined $190,000 million, reportedly $185 million for Brooks, and $5 million for Hatfield. Both have pleaded not guilty to the charges
.
“This is a case about the naked greed of two people, Sandra Hatfield and David Brooks, and the lies and the fraud that they used to satisfy that greed,” Richard Lunger, Assistant U.S. Attorney told jurors in his opening statement. “In the end they lied in order to push up the price of the company’s stock, then [they] sold their stock for $190 million.”

In July 2006, shares of DHB stock were removed from American Stock Exchange listings. Although still headquartered in Pompano Beach, Florida, DHB has since been renamed Point Blank Solutions, Inc. According to the company’s Web site, Point Blank is an industry leader in ballistic technologies, including its Point Blank Body Armor and other protective apparel, for the military and other authorities.

For more information about the case, click on the following Bloomberg Business Week article on the DHB Fraud of Ex-CEO

To learn more about this and other financial fraud cases, visit the U.S. Securities and Exchange Commission’s Web site www.SEC.GOV

The case is U.S. v. David Brooks, 06-CR-550, U.S. District Court, Eastern District of New York (Central Islip).

In an effort to educate industry professionals on how to fight financial fraud, The Financial Services Division of LaBovick Law Group, P.A. is holding a Financial Fraud Seminar in conjunction with the Daily Business Review on the very relevant subject:

Investing in a Post Madoff Environment: Financial Fraud: How it's accomplished, how to detect it, and how to recover from it.

The Seminar will be held on November 19, 2009 - 8am at Phillips Point Club in West Palm Beach.

Featured Speakers for the Financial Fraud Seminar: Investing in a Post Madoff Environment include:

William Nortman, Esq., Akerman Senterfitt

Richard A. White, >Turris Consulting, LLC

Moderator: Jeffrey S. Grubman, Esq, Jeffrey S. Grubman, P.A.

This seminar is approved by the Florida Bar for 4.0 CLE Credits and 3 CPE Credits for Accounting and Financial Professionals.

Seminar Description:
Just over one year after Lehman Brothers disappeared, how does a professional help clients navigate the ever-changing financial industry landscape? Is the "great deal" your client brought to you the next Microsoft or the next Madoff? This Financial Fraud Seminar will feature speakers with an average of 20 years of securities industry and regulatory experience. They will discuss investment fraud techniques, discovery, prevention and what to do if you have a client who is a victim.

Earlier this week, Seattle Federal District Court Judge Marsha Pechman, ruled that the case against several former Washington Mutual executives and Deloitte & Touche could move forward. She dismissed some of the claims, however, denied defense requests to dismiss any defendants.

In May 2009, Judge Pechman, dismissed the initial 388 page plaintiff complaint as “verbose” and “disorganized”. In her earlier decision, she wrote the following: “The Court remains mystified at counsel’s failure to allege cohesive claims, submit helpful briefing, or prepare a response to the court's inquiry in advance of oral argument. Plaintiffs' counsel cannot expect the court to engage in the necessary analysis when counsel is not prepared to do so."

In the revised 267 page complaint, submitted by the plaintiff’s counsel, Judge Pechman, finds that it is cogent and concise”. The heart of the case involves Washington Mutual’s residential lending practices and alleges that greed to raise the bank’s stock price is a major factor in why proper standards were ignored to meet consumer demand.

This case is on behalf of individuals who purchased securities issued by Wamu or its subsidiaries from October 19, 2005 to July 23, 2008 (the “Class Period”).

After reading the complaint, one can see that there are several issues on who should be held accountable for protecting Wamu investors from fraud. Many lawyers are involved in this legal battle that can last for several years.

Fraudsters Beware: Investors will hold you accountable for your actions and justice will be served.

6 years ago, I handled a case against Securities America (Now Ameriprise) where the broker used a stolen identity. In fact, he used two stolen identities. The second one was a law school classmate of his, who then spent years straightening out the mess.

Fast forward to today. A broker, using the name Joseph Bonnano, in Ohio entered a guilty plea related to the falsehoods one must tell in order to propagate a stolen identity, in this case Timothy Hyde. In the prior case that I handled, much money was missing and lost.

When I handled the Securities America case, they tried to say that the broker, even though he used a phony name, was properly registered. He wasn’t of course, since he did not use his real name.

The Ohio broker’s clients may have the right to rescission – to pick the trades they don’t like and ask for their money back. So if you’re a client of Joseph Bonnano, also known as Timothy Hyde, you may be able to get second chance.

The one interesting thing we learned from the earlier case is that FINRA collects fingerprints but does not run each set of prints through a database like you see on CSI (even though there’s poetic license there as well). Instead, they just compare names and social security numbers to see if anything pops up on the national criminal database. That’s how an identity thief gets registered as a stockbroker.

Barry Kaye, who allegedly made his fortune in the life settlement market is facing more bad news. First, he was forced to reduce his contribution to Florida Atlantic University to $5,000,000 from his planned $16,000,000. Now Investment News is reporting, that the Ohio Department of Insurance is investigating his life settlement sales in that state. The article reports that he has been sued by an 81 year-old life settlement investor for a failed transaction.

A life settlement begins with the purchase of a high value life insurance policy by an investor. The investor can either pay with their own cash or borrow the cash from a willing borrower, usually a financial institution. So, either using their own or someone else’s cash the investor pays the premiums for two years, to avoid the contestability period. At that point, the policy becomes a free asset and can be sold. It was commonly believed that policies had higher values in the resale market than their cash value.

The problem, not surprisingly, is that the entire transaction was based on the availability of willing buyers. Like many great ideas of 2001-2007, these ideas don’t look so good in 2008 and 2009. The new owner of the policy has to pay the premiums, a significant sum in many cases. So the original investor ends up with no buyer, a policy they didn’t need but were convinced that they did, and possibly a significant loan that they don’t want, can’t afford and expected to be able to repay upon sale of the insurance policy. Oops.

No free lunches people. This was too good to be true and it was a sham to begin with. But the sellers of these schemes should have known better and made better disclosures.

As prior readers of The Law Planet Blog know, I have a strong dislike for Equity Index Annuities. I think they are lousy products and, to the extent they are sold, should be sold by someone who has proven at least a modicum of securities knowledge. Insurance salesman, without a Series 6 or 7 license, have not proven this knowledge. Yet they were allowed to sell complicated, market-based products.

I cheered last year when the SEC announced Rule 151A which would bring these products under their purview. It would also require licensing of salespeople and registration with a broker-dealer. All of these are good things. The Insurance and Annuity industry did not agree with me. It was nothing personal, I’m sure.

The industry took their case to court, in the case American Equity Investment Life Insurance Company v. Securities and Exchange Commission (July 21, 2009-6) on Petitions to argue that the Rule should not be enforced. The industry won, and lost.

There should be no joy in Mudville here. The District of Columbia Court of Appeals has told the SEC what it did wrong and what it needs to do right. On the other hand, the Court told the insurance industry that these products can be regulated as securities. For me, that’s the important part.

The court wrote “In this case, the SEC has adopted an interpretation that is based in reason. By their nature, FIAs ‘appeal to the purchaser not on the usual insurance basis of stability and security but on the prospect of ‘growth’ through sound investment management.’” This is what I’ve been saying all along. This is a market-based product. It is a security. It should be sold by qualified securities salespeople. Now it’s up to the SEC to make the requisite findings regarding its rulemaking and give it another try.

Stay tuned…

The top Accounting Officer at Beazer Homes USA, Michael Rand, has been charged with fraud and misleading company auditors by the Securities and Exchange Commission.

An SEC complaint filed in federal court, alleges that Michael T. Rand, Accounting Officer for Beazer Homes, deceived investors by fraudulently recorded improper accounting reserves during 2000 and 2005. This little creative accounting decreased Beazer's reported net income considerably.

According to Robert Khuzami, Director of the SEC's Division of Enforcement:

"Michael Rand orchestrated an old-fashioned 'cookie jar' earnings management scheme where he hid from view over $60 million in so-called reserves. Then when Beazer's business declined, he fraudulently reversed those secret reserves and appeased financial analysts, enticed new investors, and most importantly earned himself an undeserved lucrative bonus."

The SEC complaint against the Beazer Chief Accounting Officer, Michael Rand explicitly gives details on how he masterminded this Accounting scheme and profited personally. He personally sold stocks valued at $3 million and earned $1.7 million in bonuses. Was it worth it, to lose everything and risk going to jail? I guess only Mr. Rand can answer this question. I am certain that the Beazer investors are not happy about being duped by these false earnings statements. Time will tell if there were others involved in this scheme.

As part of FINRA’s ongoing effort to consolidate and reconcile the former NASD and NYSE manuals, changes are in the works. FINRA recently filed a proposed rule change that is going to make changes to FINRA suitability rules, as we have known them, noticeably different.

FINRA’s proposed rules governing Suitability and Know Your Customer Obligations will expand the obligations of registered representatives when recommending securities or investment strategies­ to customers. This is interesting because it looks like FINRA is moving towards codifying a fiduciary standard, or at least a modified fiduciary standard.

In the past, a fiduciary duty in a non-discretionary account related to only the execution of trades and custody of assets. Now, if an investment strategy encompasses assets away from the firm, that strategy falls within the proposed rule. For instance, the recommendation to retain stocks in an account at another brokerage firm may be considered recommending an investment strategy as may the recommendation to hold, and not sell, a particular stock.

This represents a significant change in the relationship a broker has with his/her client and will broaden the areas of responsibility when making suitability determinations.

It's a new dawn. It's a new day and investors in Florida should be feeling good. Florida Governor Charlie Crist signed House Bill 483 into law on Monday, which adds protections for Securities investors today, designed to protect securities investors from Bernie Madoff type ponzi schemes.

The Bill's sponsor, State Representative Tom Grady (R- Naples) is quoted as saying the following in a recent interview:

“Our economy will grow stronger if investors have confidence in our financial markets. By increasing the tools available to the state to prosecute violators of our securities laws, we protect investors and foster needed trust in the system."

House Bill 483 gives additional power to the Office of Financial Regulation for prosecution of violations of the Florida Securities and Investor Protection Act. Whistleblowers will also be compensated with rewards for original information regarding money laundering investigations.

Governor Crist issued the following statement on House Bill 483:

“Investors play a critical role in the success of Florida’s economy, and this legislation helps ensure their hard-earned money is protected. I am committed to maintaining the integrity of our markets. Enhancing protection measures and oversight is the best way to crack down on fraudulent activity and increase consumer confidence.”

HB 483 - Investor Protections received overwhelming support from legislators. This Bill provides the following Investor Protections according to the House of Representatives site:

Expands jurisdiction of Office of Statewide Prosecution to investigate & prosecute specified additional offenses; revises various provisions of law relating to viatical settlements; exempts specified transactions in viatical settlement investments from specified registration requirements; revises registration requirements; excludes post judgment interest from payments from fund; expands class of persons related to or associated with applicant or registrant for which specified violations may result in adverse actions taken against registrations; requires Financial Services Commission to adopt rules relating to disciplinary guidelines & temporary disqualification; authorizes OFR to apply to court for specified orders; specifies additional investigation & enforcement authority of AG; authorizes AG to recover costs & attorney fees; authorizes OFR use of such information in prosecution actions; increases amount of specified administrative fines; authorizes OFR to bar specified persons from submitting applications or notifications for license or registration under specified circumstances; revises criteria for prohibited practices relating to commodities; authorizes FDLE to enter into agreements to pay rewards for specified information; expands subject matter jurisdiction of statewide grand jury to include specified additional offenses.

If you have original information regarding Investor fraud you may want to contact an attorney to discuss your rights. If you want to learn more on Securities litigation and your rights as a whistleblower, visit the following pages on Securities Litigation and Stockbroker fraud.

Today, I came across an interesting article from Bloomberg News on the Arbitration debate over financial investments. It was a Commentary written by Bloomberg News Columnist Susan Antilla entitled "Obama Fails to End Kangaroo Courts for Investors".

In the article, Susan highlights the following statement from President Obama:

The Securities and Exchange Commission “should study the use of mandatory arbitration clauses in investor contracts,” and then pursue legislation if appropriate,

At the end of the Commentary, she adds:

That argument is more bogus today than ever, because cases increasingly involve the mass-marketing of financial products by multiple brokerage firms.

“The concern is that the industry arbitrator could be on a panel telling others that ‘everybody does it,’” says Brian Smiley, the president of Piaba.

And in a closed justice system where nobody can come to court and watch, who would ever know?

The Arbitration Commentary gives food for thought and highlights the key issues, but it is hard to argue over, which side Susan is on in the Arbitration argument. She makes her point very clear on the issue.

It is safe to say that after losing a loved one, a widow has a lot on their plate, However, this loss does not mean that Financial Advisors can ignore them or mismanage their account. A recent study by Allianz Life found that

About 44% of widows are inclined to obtain financial advice in new ways, and that 70% of those using financial advisers considered firing their advisers in the first three years after their husbands' deaths.

This tragic loss does not give Financial Advisers the right to prey upon Widows with risky financial investments, mismanagement of funds or simply ignoring the widow altogether.

Five simple steps that a widow can use for Financial Guidance and respect from Financial Advisors include:

Step one: Deal with your emotional needs first after the death of your spouse. Having a clear mind and perspective is key before making major decisions,

Step two: Organize your finances and make a budget. Looking at your entire financial picture allows you to see what you need financially to live on.

Step three: Calculate your net worth. Take a look at all of your assets, investments, stocks, home, bank accounts, bonds, and everything that is of value. Ask your Financial Advisor to give you a report of what your portfolio is worth, present value and a comparison of what it was worth when your husband was alive. Give them a specific time frame of when you expect this data.

Step four: Identify a few key Financial Advisers and Interview them for your business. Compare the Financial Adviser that was working with your spouse to the new ones that are recommended by reliable sources. Make a checklist of things that are important to you in an adviser. Rate each Adviser with a score for each of your checklist items and come up with a ranking system for comparison. Try to be objective and compare each adviser on the same benchmarks.

Step five: Sit down with your Chosen Financial Advisor and develop a long-term financial plan for your investments. Share with the selected Financial Advisor that they were selected after a careful screening process. This will allow them to see that you are serious about service and expect excellent Customer Service. Set aside a specific timeframe for a review, that you are comfortable with, i.e., monthly, bi-monthly, quarterly, semi annually. Make sure that the Financial Advisor agrees to this timeframe to go over your portfolio and hold them to it. If they fail to service your account properly, go back to your list and replace them with someone that will treat you the way that you expect to be treated.

Read the book, On Your Own: A Widow's Passage to Emotional & Financial Well-being,by Alexandra Armstrong and Mary R. Donahue for more information on how a Widow can take charge of their life and finances without being taken advantage of by a Financial Advisor. The book retails for under $20 on Amazon and other online retailers.

If you are a Widow, please note that you are not alone, According to an article on the subject from Investment News, nearly 800,000 women become widows each year. There is much comfort in numbers. Join a support group for women that are recent widows. You may find that sharing your experiences present, past and future can help you cope with your loss.

To learn more on other ways for Widows to protect themselves against Investor fraud, view some of the following Financial Services pages on Stockbroker fraud, Securities Issues, or dispute resolutions.

Allen Stanford, Chairman of Stanford Group holdings, surrendered to authorities yesterday, will be officially charged by SEC today in Court. He is accused of stealing over $8 billion from investors.

According to Bloomberg News and The Washington Post,

The SEC lawsuit indicates in its compmplaint that Stanford International Bank misled investors by touting "improbable, if not impossible" returns for investments.

The SEC alleges that the Stanford Group Co. sold $8 billion of certificates of deposit in Stanford International Bank. The financial advisors of the company misled clients to believe that their money would be placed primarily in easily sold financial instruments monitored by over 20 analysts and closely audited by Antiguan regulators.

Instead Stanford and the company's chief financial officer managed most of the portfolio and invested a substantial amount of it in real estate and private equity.