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RIK filed a FINRA arbitration against TD Ameritrade last week on behalf of a New Jersey family. A former TD Ameritrade broker named Ralph Wood, Jr., acted as an unregistered advisor to numerous customer accounts in the Short Hills, New Jersey branch (including our client’s), and lost tens of millions of dollars trading the SVXY for various clients of the firm. It is believed former TD broker Rushi Patel introduced Wood to the customers and knew that the accounts were being traded by Wood, an unregistered, unapproved third party advisor. If you invested with TD Ameritrade through Ralph Wood, Jr. or Rushi Patel, please contact us as we are actively investigating this improper activity.

Allowing an unregistered advisor to trade customer accounts without express written authority and oversight is a violation of FINRA Rules, including rules concerning account documentation and supervision. Investors who lost money with Wood in this strategy may have claims against TD Ameritrade for their losses.

What is it going to take for the SEC to respond accordingly to tips of insider trading and hedge-fund fraud? When initial suspicion of Bernie Madoff’s widespread Ponzi scheme was discovered by FINRA, the SEC was slow to act on it. Now, multiple referrals from FINRA of suspicious trading at the hedge-fund firm, SAC Capital Advisors LP, have emerged and the SEC is hesitant to take further action once again. Below is the article from the Wall Street Journal regarding this issue.

Referrals on SAC Disclosed By JEAN EAGLESHAM June 16th, 2011

The Securities and Exchange Commission has received 65 referrals of suspicious trading at hedge-fund firm SAC Capital Advisors LP over the last decade, or 46 more than previously disclosed, according to Sen. Charles Grassley.

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