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Girard Bengali, APC

Los Angeles Legal Issues Blog

U.S. women's national team files lawsuit

Soccer fans in California and throughout the country generally acknowledge that the women's national team has had more success than the men's team. However, the women's team has filed a gender discrimination claim against the U.S. Soccer Federation (USSF). The lawsuit claims that the USSF has violated both the Equal Pay Act and Title VII of the Civil Rights Act by not paying female players on par with male players.

However, the USSF says that the pay disparity is based on the fact that each team collectively bargained separate deals for themselves. Therefore, any disparity in pay is based on legitimate business decisions as opposed to institutionalized gender discrimination. Furthermore, the USSF claims that differences in pay are based on differences in revenue generated by the men's team compared to those generated by the women's team. The collective bargaining agreement for the women's national team runs through 2021.

Financial regulator proposes new rule

Most brokerage firms and brokers in California and throughout the country take steps to ensure compliance with applicable regulations. However, some do not make an effort to comply with the financial laws and regulations. To help combat this problem, FINRA has proposed a rule that require firms labeled as risky to pay into a fund. This fund would be used to pay judgments rendered against these firms in arbitration.

The regulator says that there is an issue with arbitration awards that have not been paid. Therefore, having such a fund will make it easier to ensure that firms follow through on their obligation to pay. According to FINRA, companies that do not have sufficient oversight can cause investors to doubt the integrity of the brokerage industry. Customers may also doubt the integrity of the markets themselves when brokers have violated securities laws or FINRA regulations.

Be careful when signing a severance agreement

It has become almost customary for California companies to offer executives and other professionals in the Los Angeles area what is referred to as a severance agreement when they decide to let these types of employees go.

Severance agreements are possible even when an employee is getting fired for alleged poor performance or for some other specific reason, but they are commonplace in situations where an employer is laying an employee off for business reasons or simply because the employee is no longer the right fit for the company.

Can you trust your financial advisor?

Finding a broker you can trust is not always easy. Even a financial advisor who comes highly recommended by a friend may not be a good fit for you. You want someone who will be straight with you and guide you in making decisions that will help you meet your goals, not just put commission money into the broker's pocket.

Nevertheless, if you are looking for an advisor, it is probably because you don't have all the answers. At some point, you know you will have to trust your broker. However, how do you know if your financial advisor is acting in your best interests or taking you for a ride?

Judge rules against law firm in sanctions motion

Workers are generally entitled to equal pay and other protections based on gender and other attributes. A $100 million lawsuit against the law firm Morrison & Foerster LLP, which was originally founded in California and has an office in Los Angeles, claims that pregnant workers were placed on a "mommy track" that made it difficult to achieve career success. The suit was brought by seven women who have so far remained anonymous. However, the identities of the plaintiffs may need to be revealed if the case proceeds.

The firm filed a legal action of its own against one of the plaintiffs in the case. It claimed that she took action knowing that the claims against the company were baseless. Furthermore, it claimed that the former employee signed a release of claims document before going on leave because of her pregnancy. It sought sanctions against the woman and her attorneys while claiming that her claim should be barred because she negotiated the agreement with the firm.

FINRA sanctions broker for undisclosed customer loan

The Financial Industry Regulatory Authority (FINRA) suspended a prominent broker who provided financial services in California and across the country. The suspension came after the man allegedly borrowed $200,000 from one of his customers in 2013 without informing his employer at the time, LPL Financial. The four-month suspension is only the latest step in an ongoing battle over his 2014 dismissal from his job. LPL Financial claimed at the time that the man failed to follow regulations as well as firm policies, stating that he told the company that he had not borrowed money from his customers on mandatory compliance questionnaires.

According to FINRA, the broker never repaid the loans from his customer. Instead, he filed for bankruptcy in December 2017 and included the debt as one of his personal loans. Because he filed for Chapter 11 bankruptcy, the outstanding debt was included in his reorganization plan, approved by a court in 2018. While the broker never confirmed or denied FINRA's allegations, he was ordered to take an exam to requalify as a securities broker and pay a $5,000 fine. He later registered with another independent trading firm. 

Overview of the SEC's enforcement activities

Many financial professionals in the Los Angeles area, basically all of those who trade in regulated stocks, bonds and other securities, may find themselves under investigation by the United States Securities and Exchange Commission, or SEC.

The SEC is responsible for regulating the nation's public financial markets to assure that they are fair and transparent. This fairness and transparency in turn encourages investment and economic growth.

Man receives FINRA ban in Bitcoin case

The Financial Industry Regulatory Authority (FINRA) has recently banned a trader involved in a $1.5 million Bitcoin scheme. The trader told investors that they could buy the Bitcoin at a discount and receive higher than normal returns. According to FINRA, the money was sent to the man's brother in Europe, and the Colorado Division of Securities says that the brother was a wanted fugitive. A consent order was signed on Jan. 8, 2019, but the trader did not admit that he was guilty.

However, he did acknowledge that he had received requests for documents from FINRA but did not necessarily provide the records that the group sought. He also claimed that he was deluded by his brother, and the consent letter did not say that he took part in a scheme to defraud investors.

Civil suit against Securities America may head to arbitration

Finance professionals in California and around the country who are accused of misconduct may face serious civil and criminal sanctions. A pending civil case against a brokerage firm called Securities America demonstrates the types of penalties that might be assessed.

A former financial adviser who was employed by Securities America reportedly misappropriated assets from a client's accounts for years before he was caught. The client had hired him in 1999 and considered him to be a family friend. The value of the client's account dropped from a value of $15 million to $50,000 during the time in which he managed it.

Unfair trade practices in the insurance business

A previous post on this blog discussed the elements of a claim of bad faith. That post mentioned that a bad faith claim can help homeowners in the Los Angeles area, as well as those who own houses as investment property, fight back against an insurance company that, for whatever reason, is not being fair or reasonable in handling the owner's loss or damage to their property.

Otherwise, an insurance company may have every incentive to delay paying a claim, to make unnecessary requests of an insured before agreeing to pay, or even to outright deny a legitimate claim on a technicality or, worse, simply because the company feels it can use its superior resources to force an insured to take a lowball offer.

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