Market Insights: Business

What Will Health Care Look Like in 5-15 Years?

Senior executives and innovation officers point to pioneering approaches that will likely become commonplace in health care:

  • new care delivery options
  • revamped clinical teams
  • data analytics
  • value-based payment models
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Wells Fargo Said to Face DOJ Probe of Wholesale-Banking Business

  • The Department of Justice investigation is focusing on concerns that bank employees improperly altered customer data.

  • Some workers added information to internal customer records without the clients’ knowledge, a person briefed on the situation said in May.

  • Wells Fargo has struggled to move past a wave of scandals, which led to a Federal Reserve ban on increasing assets until the lender fixes its missteps.

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Details Emerge on Troubles at Wells Fargo Wealth Unit

  • Two whistleblower letters cited sales goals that led employees to push products with more fees

  • Financial advisors encouraged investors to move funds into products in order to generate extra fees, more revenue and larger bonuses

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SEC Fines Morgan Stanley $3.6M for Failing to Protect Client Funds

  • The SEC finds that they failed to have reasonably designed policies and procedures in place to prevent its advisory representatives from misusing or misappropriating funds from client accounts.

  • Approximately $7 million was misused or misappropriated out of 4 advisory clients’ accounts in approximately 110 unauthorized transactions occurring over a period of nearly a year.
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Merrill Hit With $15M SEC Penalty Over RMBS Infractions

  • Merrill Lynch agreed to pay SEC $15+ million to settle charges that employees misled customers into overpaying for securities

  • Merrill’s RMBS traders and salespeople “illegally profited from excessive, undisclosed commissions — called ‘markups’ — which in some cases were more than twice the amount the customers should have paid” – SEC

  • Merrill also failed to have compliance and surveillance procedures in place that were reasonably designed to prevent and detect the misconduct that increased the firm’s profits 

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New York Halts $5M Hedge Fund Scheme Targeting Elderly

  • Advisor, Dean S. Mustaphalli, owner and operator of Mustaphalli Capital Partners Fund LP, was charged with operating a securities fraud scheme that involved targeting investors who were elderly and at or near retirement

  • In total, Mustaphalli allegedly fraudulently solicited his former clients to invest over $12 million and lost over $11 million of their money.

  • According to the indictment,  Mustaphalli’s scheme brought in $5M+ from 22 victims between June 2014 and March 2017 and a separate civil lawsuit alleges that he fraudulently solicited an additional $7 million from prior investors between 2012 and 2014

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Treasury’s Crime Unit, Consumer Bureau Team Up on Elder Fraud Prevention

  • Elder financial exploitation, “the illegal or improper use of an older person’s funds, property or assets,” is the “most common form of elder abuse in the United States.”

  • June 7 webcast will spotlight the importance of suspicious activity reports

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Watch Out for These 4 Behaviors by Your Financial Professional

  • Asking for a Personal Loan

  • Sales of Promissory Notes

  • Using Personal Email

  • Asking You to Write a Check to a Person or Entity Other than the Firm

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LPL Financial Fined $26M over Unregistered Securities Sales

  • LPL offered and sold unregistered, nonexempt securities

  • LPL failed to reasonably supervise the flow of information to ensure full & proper compliance with state securities registration requirements

  • Deal between LPL & state securities regulators requires LPL to repurchase securities from investors with interest & pay up to $26M

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Wells Fargo Fined $1 Billion Over Mistreatment of Consumers

  • Fed cited a pattern of abuses and lapses
  • Firm tries to resolve a year & a half of scandals across its operations
  • Wells Fargo still faces scrutiny with the DOJ & SEC examining the wealth management unit
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