Products January 6, 2010

TD AMERITRADE Offers IRA Resources

TD AMERITRADE said it unveiled new IRA-focused tools and resources to help investors and their advisers better understand how the new Roth IRA rules might impact their retirement investments.
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Prior to the 2010 tax year, investors with modified adjusted gross incomes of more than $100,000 were ineligible to convert to Roth IRA. Under the new rules, anyone can enjoy the potential tax benefits of a Roth.

TD AMERITRADE’s said its new resources include:

  • a Roth Conversion Analyzer tool that can help clients decide whether to convert to a Roth;
  • a professional version of the Roth Conversion Analyzer created specifically for the company’s registered investment adviser clients;
  • answers to frequently asked questions about converting to a Roth;
  • an online chat to address TD AMERITRADE’S clients’ IRA conversion questions.

“More than half of our clients indicated in a recent survey a desire to learn more about Roth IRA conversions. Updating our offerings to provide more education, guidance and information was therefore critical in order for us to help more investors better understand how these changes may impact their retirement plans,” said Diane Young, director of retirement and goal planning at TD AMERITRADE (see “Investors Want More Info before Roth Conversion”).

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Compliance January 6, 2010

Broker, Bank off the Hook for Allegedly Assisting Ponzi Schemer

A federal appeals court overturned a ruling against a bank and a broker accused of helping to keep a Ponzi scheme alive.
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The Ponzi scheme involved CDs and was operated by Chester, Pennsylvania businessman Robert Bentley, who pleaded guilty to securities fraud.

The receiver for Bentley’s company then accused third parties of having liability in the case. In a civil suit, David Marion, the receiver, claimed that Bentley’s scheme would have unraveled sooner if not for the help Peninsula Bank of Delray Beach, Florida, and its former vice president, Joseph Marzouca, as well as Southeastern Securities Inc., of Miami, and its president, Theodore Benghiat.

Marion’s theory was that Marzouca and Benghiat, in concert with Bentley, “had harmed the corporation by saddling it with additional liability to the scheme’s victims,” the court opinion said.

The complaint alleged that the defendants allowed the scheme to succeed for as long as it did by failing to properly supervise Bentley “in the face of a duty to do so” and by infusing the scheme with additional cash “despite knowledge of the precarious financial condition of BFS and its inability to honor its investment contracts,” according to the opinion.

A jury said that Peninsula and Marzouca should pay $13.1 million, and Southeastern Securities and Benghiat should pay nearly $19.7 million.

In an appeal, attorneys for the bank and broker argued that Marion’s accusations of liability were fatally flawed. Specifically, they argued that Marion was pursuing claims that could only be pursued by investors.

The 3rd Circuit Court of Appeals sided with the defense, ruling that Marion did not have the right to pursue such claims. Although, according to the opinion, it is undisputed that Benghiat and Marzouca, whether intentionally or unintentionally, helped the scheme stay afloat.

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