Understand Your Rights. Solve Your Legal Problems
The Securities and Exchange Commission (SEC) said last week that Morgan Stanley has agreed to pay a $13 million penalty for overbilling 149,000 of its clients. The Attorney General of the State of New York also announced on Friday that Citigroup has agreed to pay a $1 million fine for overcharging its clients by $16 million.
"This is yet more evidence that the large financial institutions care more about making money for themselves than for their clients," said Bill Harris, CEO of Personal Capital. "They're brokers who sell whatever makes them the most money, rather than true advisors who look out for their clients' money first."
Personal Capital is a fiduciary of its clients' money - meaning that it is required to (and desires to) offer advice in the best interest of its clients, not of the firm itself. Brokers are not fiduciaries. Recently approved rules from the Department of Labor are scheduled for implementation in April of this year, and would require even brokers to operate as a fiduciary when selling 401k, 403b and Individual Retirement Accounts. These new rules have faced fierce opposition from brokers and from the well-financed financial services lobby. The incoming administration has indicated it may delay or repeal these rules. Personal Capital believes the repeal of these regulations would be a disservice to all investors attempting to provide for a secure retirement.
Christine Jockie, a spokesperson for Morgan Stanley, explained that these transgressions were "inadvertent billing errors." Financial Advisor magazine reported that "the SEC investigation uncovered 39 different types of billing errors."
"It strains credulity that 39 different types of billing errors were just snafus, and not orchestrated policies," said Harris. "I would ask how many of the 39 were in the client's favour and how many in favour of the firm? Morgan Stanley 'neither admitted nor denied' the allegations - where have you heard this before?"
"While not rising to the level of Wells Fargo's creation of over two million unauthorized accounts," continued Harris, "overbilling 149,000 clients appears to be a darn good try."
"The SEC's order further finds that Morgan Stanley failed to comply with the annual surprise custody examination requirements for two consecutive years when it did not provide its independent public accountant with an accurate or complete list of client funds and securities for examination," said the SEC in their Friday press release. "Morgan Stanley also failed to maintain and preserve client contracts."
"The custody rule's surprise examination requirement is designed to provide clients protection against assets being misappropriated or misused," said Sanjay Wadhwa, Senior Associate Director of the SEC's New York office. "Morgan Stanley failed in consecutive years to do what was required of it to give investment advisory accounts that important protection."
As to Citigroup, New York Attorney General Eric T. Schneiderman announced an agreement with "Citigroup to reimburse more than 31,000 Citi customers who were charged higher advisory fees than they negotiated. The agreement returns nearly $16 million to about 31,000 Citigroup customers."
"I wonder," mused Harris, "what happens to the retirement money of American families if the brokers, congresspeople and incoming administration succeed in repealing the Department of Labor rules which protect retirement savings, the Dodd Frank act which protects consumers and the country from broker malfeasance, the Glass Steagall act which prevents big banks from using low-interest federal funding to gamble in investment markets (oops, that was already repealed which led to the great recession of 2008), and the Consumer Financial Protection Board (CFPB) - the only regulatory agency chartered to protect consumers rather than to protect the banks themselves?"
"To toot our own horn for a moment," said Harris, "we started Personal Capital to do the exact opposite. We've built a true advisory service that combines the best digital technology with dedicated financial advisors, to deliver on our mission statement 'better financial lives through technology and people'. I hope the rest of the industry moves in this direction soon."
(Source: Personal Capital)
With political polarization at its highest level in decades in the US, an important question is how to close the opinion gap between liberals and conservatives. While some level of disagreement is healthy for democracy, high levels of polarization are associated with political deadlock, which may hinder political reforms and slow economic growth.
A recent study by MIT Sloan PhD student Erik Duhaime and MIT Sloan School of Management Prof. Evan Apfelbaum suggests that the way information is presented influences political polarization. They found that providing impartial facts can bring people closer together, but not when people are also prompted to think about their relevant political positions.
In their study, they examined the impact of information on people's views about the divisive topic of federal taxes. They assessed whether providing a "taxpayer receipt" - an impartial, objective breakdown of how the government spends one's tax dollars that is published annually on the official White House website - can mitigate polarized views regarding the perceived legitimacy of taxes.
"After we showed a nationally representative sample the taxpayer receipt, the previously strong relationship between how conservative or liberal someone was and their view on taxes virtually disappeared," explains Duhaime, noting that this depolarization effect did not occur if people were asked how they want their taxes to be spent when they viewed the receipt.
Apfelbaum says, "When we presented information in the plainest way possible -- just providing people with a numerical breakdown of where their taxes go -- there was a convergence of views on the legitimacy of taxes. Liberals' and conservatives' views became more similar to one another."
The study supports a growing body of evidence that increased political polarization is due in part to changes in the way people consume information. "People selectively tune into news outlets that confirm their preexisting views, which incentivizes the media to provide more biased information. And social media may create 'echo chambers' in which individuals are exposed to biased information from other likeminded people," says Duhaime.
Other research, he notes, shows that Facebook and Twitter users are more likely to be exposed to and click on stories that adhere to their own ideological views than ones that do not.
"To counter this phenomenon, we need to ensure that everyone has access to the same neutral facts and information, and give them the space to consider the information on their own. This is particularly relevant post-election, as social media continues to fuel a large political divide," he says.
As for the tax receipt, Duhaime notes that taxpayers in the U.K. receive such receipts in the mail as a matter of policy, whereas in the US this information is only provided online for people who are motivated to seek it out. "Even if it makes a small difference, it's a relatively low-cost mechanism that could be explored in the US to help reduce political polarization about one important issue at the heart of the political divide."
Duhaime and Apfelbaum coauthored the paper, "Can Information Decrease Political Polarization? Evidence from the US Taxpayer Receipt," which was published this month in Social Psychological and Personality Science.
The MIT Sloan School of Management is where smart, independent leaders come together to solve problems, create new organizations, and improve the world. Learn more at mitsloan.mit.edu.
(Source: MIT Sloan School of Management)
Annapolis Group, a Nova Scotia company, recently gave notice of its intention to commence legal proceedings against Halifax Regional Municipality (HRM), claiming approximately $120 Million in damages.
HRM has effectively expropriated - without compensation - Annapolis' Blue Mountain - Birch Cove Lake lands.
On September 6th 2016, HRM finally refused Annapolis' request to initiate secondary planning of the Annapolis lands which had been zoned for development since 2006. Annapolis has no other choice than to take legal action.
"Since HRM is not going to allow us to develop our lands, we are simply asking to receive fair compensation from the municipality for the lands that have been effectively expropriated," said Rob Gillis, Vice Chair of Annapolis Group and President of Thornridge Holdings Limited, the parent company of Annapolis. "We don't want to be in this position, but HRM has given us no other choice."
The claim will include the following allegations:
-- that HRM has on a de facto basis expropriated the Annapolis lands
without fair compensation;
-- that HRM has abused its authority for the purposes of harming Annapolis
including acting in bad faith and discriminating against Annapolis; and
-- that HRM has been unjustly enriched at the expense of Annapolis.
For the past ten years Annapolis has actively tried to negotiate a fair agreement with HRM, consistently attempting to find a reasonable compromise. Annapolis even took part in a facilitated negotiation with HRM. Unfortunately, HRM intentionally dragged out this process for years, ignored the Facilitator's report and refused to allow Annapolis to proceed with its proposed development.
"By treating businesses unfairly, HRM is jeopardizing future investments in the region, economic prosperity and jobs. The municipality should focus on higher priorities such as jobs, tax revenue, services, and infrastructure," said Rob Gillis.
The rejected development would have provided over 300 acres of parkland and public access to a vast wilderness reserve of over 4,000 acres that is already provincially protected.
(Source: Annapolis Group)
The team at Legal Floris LLC is helping FBME Bank customers recover their funds. Legal Floris LLC currently represents 1,000+ FBME Bank customers who are seeking recovery of funds.
FBME Bank (the Federal Bank of the Middle East) recently lost its license for banking after a long and winding journey of problems. Legal Floris has carefully watched FBME Bank's progress and has scrutinized the bank's current status. The legal firm is working with FBME Bank customers who want to recover their funds safely and efficiently. Legal Floris works with more than 1,000 FBME Bank claimants.
While FBME Bank customers can appeal the Central Bank to make DGS claims, many claims are still pending. 1,000+ of 6,500 FBME Bank customers have filed claims to recover their funds, but the process can be a slow one for several applications. The reason is that the Committee of the Deposit Guarantee and Resolution of Credit and Other Institutions Scheme hand-picks a number of claims they pursue.
Legal Floris works with claimants to get their cases resolved. According to the Legal Floris team, they have analyzed EU directives on bank failures, jurisprudence, EU law, and the Deposit Guarantee and Resolution of Credit and Other Institutions Scheme Law of 2016. Then, they discussed their findings with stakeholders and other knowledgeable sources to find a solution for FBME Bank customers with pending claims.
"The Central Bank can't just honour all claims to the DGS without further investigation," said Floris Alexander, spokesman of Legal Floris LLC. Some of the deposits at FBME Bank are exempt from DGS compensation, and the Unit for Combating Money Laundering has an interest in some accounts.
According to Alexander, "A claim to the DGS does not necessarily result in an immediate and irrevocable payment of the insured funds."
Legal Floris LLC works with claimants to get their funds released to them efficiently by carefully combing through each case to find the reasons why the committee might go ahead with approving them. Legal Floris LLC creates a legal opinion on the claim and presents evidence backing clients' statements while answering all potential questions. This summary and evidence can be used to encourage the committee to quickly come to a positive decision for the client.
For accounts in Cyprus, the team at Legal Floris doesn't accept payments from clients until after their case is settled, after their insured deposits have been received. This strategy includes customers with pending or rejected DGS claims and is valid until the courts order their verdicts.
FBME Bank customers who are trying to secure their funds from the bank can contact Legal Floris for immediate assistance with their DGS claims. "I'm thrilled to have found a way to circumvent the sometimes-lengthy wait of the claims process and help people who want to get compensated," said Alexander.
(Source: Legal Floris LLC)
There are now over 800 lawyers in the UK working for ‘virtual’ law firms as advances in technology drive the rise of a new business model in the legal sector, shows new research by Hazlewoods, Chartered Accountants and Business Advisors who specialise in the legal profession.
A ‘virtual’ law firm is a decentralised legal practice where lawyers work remotely and use shared services provided by a central hub, as such they are at the top-end of the gig economy. ‘Virtual’ firms have central services responsible for functions such as compliance, accounting and administration.
This decentralised business model means ‘virtual’ law firms have lower fixed costs, and lawyers therefore tend to be paid a higher proportion of the fees they make than in traditional firms where they are likely to be salaried. These firms do not have to pay rent on expensive office space nor do they have to employ as many support staff, such as paralegals, assistants and on-site IT staff.
Hazlewoods says that practising through a ‘virtual’ law firm also allows individual lawyers to avoid much of the compliance and administration burden they would have to bear if they ran their own firm. As the majority of compliance and administrative work is dealt with centrally, lawyers have more time to focus on fee paying activity.
The mobile and decentralised format of these firms enables lawyers to be flexible in how much work they take on and what hours they work. This provides a better work-life balance which may be important for some lawyers who may have had enough of constant high targets, or maybe have other commitments, such as a young family.
Hazlewoods says that advances in modern IT has also been key to the development of ‘virtual’ law firms as data can now be managed securely and efficiently regardless of geographic distance. This also helps lawyers to collaborate on cases and have all the information immediately available to them whether they are at home or on the move.
Technology also enables ‘virtual’ law firms to deliver services to clients through secure online portals which means entire firms can operate largely from mobile devices. Using these portals, lawyers can assemble documents, communicate securely with clients, and handle their billing and administration.
Hazlewoods adds that growth in the legal profession in recent years has not been uniform, with innovative offerings often acting as major growth drivers. Some firms, for example, have set up ‘on demand’ services providing temporary in-house lawyers, including: ‘Agile’ by Eversheds; ‘Lawyers On Demand’ by Brewin Leighton Paisner; ‘Vario’ by Pinsent Masons.
Jon Cartwright, Partner in Hazelwoods’ Legal Team, says; “The growing population of ‘virtual lawyers’ reflects the changing landscape of legal services as technology renders distance obsolete.”
“Lawyers who may have previously set up their own firms are now realising the major cost and time savings of practising remotely. In their ideal scenario, ‘virtual’ lawyers can make more money in fewer hours whilst working at times that suit them.”
“As well as providing a better work life balance, many virtual firms are ‘sector-agnostic’ and are happy to work with lawyers with any specialism. This freedom has become a key reason for the growing popularity of ‘virtual’ firms as lawyers are allowed to follow their own path.”
“The decentralised nature of ‘virtual’ firms means they can also charge lower fees should they so choose and this is widening access to legal services at a time when clients may be more price conscious.”
“The emergence of the ‘virtual’ firm is part of an ongoing diversification of legal services and traditional firms are starting to follow suit through launching their own online platforms.”
(Source: Hazlewoods)
Vaultize, a data security, rights management and file tracking company, has announced that ExxonMobil and BNP Paribas, along with several other Fortune 1000 companies, have signed on as new customers. The company has grown its US and European revenue streams by over 700% in FY16 after opening a new global headquarters in San Francisco and a regional headquarters in New York.
The growth in revenue is largely due to key new accounts won by an expanding sales team. New US and European customers include BNP Paribas, ExxonMobil, Omnicom, Schellenberg Wittmer, Credit Agricole and Wipro. Vaultize has also won numerous new accounts in India, including Intas Pharmaceuticals, Qatar First Bank, and Yes Bank.
Vaultize has captured a growing share of the DRM, enterprise file sync and share, data encryption and file tracking industry due to its singular approach to data security and to the ever-increasing need for reliable, user-friendly security solutions. The company has pioneered a data-centric approach to security. Its platform is unique in that it protects clients against external threats and mitigates the risk of internal mistakes or sabotage causing lasting damage to an organization. Most data security solutions on the market merely protect against malicious outside parties. A notable lack of easily-deployable solutions in Western markets has also driven several customers to Vaultize.
"We selected Vaultize out of several options for their software features and ease of use and implementation at client side without installing any software," said Prashant Modi, Senior Manager of IT at Intas Pharmaceuticals. "Since working with Vaultize, we've seen quicker resolution to business security discussions and no data leakage."
Vaultize founders Anand Kekre and Ankur Panchbudhe began making headway in the US and European markets by bringing CEO James Mongillo on board in early 2016 and growing its US sales team. That team was responsible for securing early client wins including ExxonMobil, BNP Paribas, and Wipro.
"The market opportunity for Vaultize is immense and growing," said Vaultize CEO Jim Mongillo. "Data breaches are increasing and protecting your company's sensitive files at all times is absolutely critical. This is especially true for finance, legal, insurance, healthcare, and manufacturing companies. Hoping for the best is simply not an option. Vaultize protects your most important assets at the data level, and that's why we have experienced so much growth in 2016."
In addition to growing its western customer base over the past year, Vaultize has continued to improve its data security, rights management, and file tracking platform with numerous new features. A few recently deployed and upcoming features include encryption for at-rest data, better tools for tailoring each customer's experience to their unique industry compliance requirements, additional rights management parameters and better encryption enveloping, which will allow customers to protect a wider range of documents and files.
(Source: Vaultize)
A survey of over 1,000 jobseekers, working professionals, and hiring decision makers reveals what professionals expect in a hiring process and want in a job, and whether employers are meeting these needs.
The Execu|Search Group just released its ‘2017 Hiring Outlook: Strategies For Engaging With Today's Talent And Improving The Candidate Experience’. The report provides insights into the considerations professionals make when deciding whether to apply for a job, join a company, or leave their current position. The Hiring Outlook also offers actionable recommendations for employers to help them attract and retain the best talent in today's candidate-driven job market, one in which job seekers have the advantage. The findings were taken from a survey of more than 1,000 job seekers, working professionals, and hiring decision makers across a number of industries.
"As the job market continues to evolve over the next year, engaging with talent will become even more critical to an organization's success," said Edward Fleischman, Chairman and CEO of The Execu|Search Group. "With this in mind, employers need to embrace transparency during the hiring process and in the workplace. They must also be aware that the candidate profile is changing, especially in regards to millennial employees as they progress from entry-level roles to management positions. To adapt to these changes, we hope employers leverage our 2017 Hiring Outlook as a resource for creating a unified culture that motivates all employees, focuses on career development, and facilitates a new model of leadership."
The Execu|Search survey found that 50% of employees plan to stay at their current company for only two years or less. Keeping this in mind, the Hiring Outlook report provides specific ways in which employers can improve the experience job candidates have during the hiring process, increase engagement and retention among current employees, and develop a more transparent culture and leadership structure that align with the needs of today's workforce.
(Source: The Execu|Search Group)
This year, over two in five American employers (43%) will provide a paid day off for Martin Luther King, Jr. Day, a notable increase from the previous all-time high of 37% recorded in each of the past two years. The nationwide survey has been conducted annually since Martin Luther, Jr. Day became a US federal holiday and reflects the responses of senior human resources and employee relations executives representing nearly 450 employers.
While the increase in businesses providing Martin Luther King, Jr. day off with pay certainly is striking, it is worth noting that the majority of US employers still do not give employees a paid day off for the federal holiday," said Molly Huie, Bloomberg BNA's Manager of Survey and Research Reports. "Putting things into perspective with other federal holidays, the number of business giving employees a paid holiday on Dr. King's birthday is on par with President's Day (37%) and far outpaces Columbus Day (16%) and Veteran's Day (24%)."
Over 7 in 10 non-business organizations (e.g., healthcare organizations, government and educational institutions) to provide a paid day off. While 73% of employees at non-business organizations will get Dr. King's birthday off with pay, only 14% of manufacturers will follow suit. Approximately one in three non-manufacturing businesses, such as financial services organizations and insurance providers, will provide a paid holiday. Over half of workers in unionized organizations (53%) will get the day off with pay, as compared to less than four in ten (39%) in non-unionized workplaces.
1 in 4 employers to hold a commemorative event. While 23% of all employers will sponsor programs or events in January to recognize Dr. King's life and achievements, no manufacturers responded that they will be doing so. Those most likely to hold a commemorative event are non-business organizations (35%) and organizations with unions (38%).
(Source: Bloomberg BNA)
Minnesotans for a Smoke-Free Generation, a coalition of 50 organizations working to prevent youth smoking, is calling for the US state to pass the law restricting the sale of tobacco age to 21.
Researchers from ClearWay Minnesota and the Minnesota Department of Health released an article in the most recent edition of Minnesota Medicine concluding that raising the state's tobacco age to 21 would have important health benefits. Their calculations suggest raising the age would prevent thousands of Minnesota kids from becoming smokers in the next 15 years.
"Two states and more than 200 cities across the country have raised the tobacco age to 21," said Dr. Raymond Boyle, Director of Research Programs at ClearWay Minnesota. "The data we lay out in this article provide compelling proof that such a policy would have an enormous health benefit in Minnesota."
The article, "Raising the Minimum Legal Sale Age for Tobacco to 21," was published in the January-February issue of Minnesota Medicine. It is the first of its kind to flesh out the specific statewide impact that raising the tobacco sale age would have on the smoking behaviour of adolescents and young adults.
Specifically, if Minnesota raised the legal sale age to 21:
David Agerter, M.D., President of the Minnesota Medical Association said: "The root of the smoking problem is new smokers starting…Making tobacco products accessible only to adults over 21 widens the gap between kids and those who can be sold cigarettes. This research confirms this is a new way to prevent kids from starting."
"The tobacco industry actively recruits replacement smokers to ensure their profits," continued Dr. Agerter. "The Minnesota Legislature can ensure our state remains a leader in protecting kids and keeping them healthy by passing Tobacco 21."
"Minnesota's comprehensive approach to tobacco prevention and treatment - including strong policies - has contributed to significantly less smoking in recent years," said Boyle. "But this research shows that raising the tobacco age to 21 would prevent future generations of young people from starting and help to end the burden of cigarette smoking."
(Source: Minnesotans for a Smoke-Free Generation & ClearWay Minnesota)
Clean Power Plan; Waters of the United States Rule; The 2015 ozone air pollution standards. These are among the Obama administration's environment and energy regulations the Trump administration is looking to repeal, according to Bloomberg BNA's 2017 Environment and Energy Outlook.
"It is clear that the cornerstones of President Obama's environmental legacy will be under siege by the Trump White House and the Republican Congress," said Larry Pearl, News Director, Environment and Energy, Bloomberg BNA. "Environmental advocates and Democrats will be aggressively defending the measures put in place in the previous administration, and it appears that they will have to wage a battle on many fronts for the foreseeable future."
Highlights of the Outlook include:
Air and Climate: Trump has repeatedly vowed to undo the Clean Power Plan, President Obama's carbon dioxide limits on power plants. Environmental advocacy organizations will be battling to stave off any Trump administration efforts to pull back from the Clean Power Plan and other U.S. and international initiatives to reduce greenhouse gas emissions. The Trump administration also may target regulations to curb ground-level ozone and industrial emissions that were hallmarks of President Obama's environmental legacy.
Energy: Attorneys and industry observers expect the new administration to curtail energy regulations. More federal lands may be opened up for oil and gas exploration and Trump has voiced his support for the Keystone XL and Dakota Access pipelines. Additionally, Yucca Mountain could be brought back to life as a potential nuclear waste repository under the Trump administration and a Republican Congress.
Water: A rule clarifying which waters the federal government can regulate may not come to pass even before a court decides its legality, if a Trump Justice Department refuses, as expected, to defend it against dozens of legal challenges. On the water resources and infrastructure front, emergency federal assistance will go to Flint and other cities with deteriorating water systems, thanks to the December enactment of the Water Infrastructure Improvements for the Nation Act.
Chemicals: In 2016, Congress approved a bipartisan overhaul of the nation's primary chemical control law, the Toxic Substances Control Act. In 2017, EPA will continue to implement the amended law, proposing rules on how to prioritize chemicals for risk evaluation and how to conduct those evaluations, among other initiatives.
(Source: Bloomberg BNA)
