In June 2013, FINRA fined brokerage firm StateTrust Investments, Inc. and its Chairman, Joseph Luis Turnes a/k/a Jose Luis Turnes, for fraudulent bond transactions. StateTrust is headquartered in Miami and has a branch office in Caracas, Venezuela. FINRA found that StateTrust charged customers unfair prices on 563 different corporate bond transactions between March 2007 and June 2010. The unfair pricing was the result of excessive markups and markdowns on bond purchases and sales, in violation of various FINRA rules and securities laws. FINRA appears to be focusing on this type of bond fraud lately, as it has fined numerous brokerage firms for charging excessive markups and markdowns.

A markup is the difference between the lower price that brokerage firms pay to buy a bond and the higher price at which they sell it to investors. And a markdown is the difference between the lower price brokerage firms pay to investors selling bonds and the higher prices for which the brokerage firms then sell the bonds. Investors typically do not know how much they are being charged for bond trades because brokers and brokerage firms often do not disclose markups and markdowns. The excessive charges can deplete or wipe out a large portion of investors’ returns or gains. Investors with significant bond portfolios may have unknowingly sustained enormous damages as a result of fraudulent bond charges. Recovery of such damages can be pursued through a binding FINRA arbitration proceeding.

EN   ES   PT     

Miami Office
Grand Bay Plaza
2665 S. Bayshore Drive
Penthouse 2B
Miami, FL 33133
Telephone: 786.628.8236

Los Angeles Office
Available by Appointment
2029 Century Park East
Century Plaza Tower
Suite 400N
Los Angeles, CA 90067
Telephone: 424.544.7930

New York City Office
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14 Wall St, 20th Floor
New York, NY 10005
Telephone: 917.382.5217

West Palm Beach Office
Northbridge Centre
515 N. Flagler Drive, Suite P-300
West Palm Beach, FL 33401
Telephone: 561.475.2887

Detroit Office
41000 Woodward Avenue,
Suite 350 East
Bloomfield Hills, Mi 48304
Telephone: 248.368.0182