Aura Financial Services Inc. - Greedy Scams
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What is the problem with our capitalistic society? Greed! Fraud! Scams! The recent economic collapse and corporate fraud highlights this problem. How do we protect against this problem? Our judicial system. No, say it ain't so. We have to resort to trial attorneys to protect us against such corporate abuse? Yes we do.
Recently, this type of greed was illustrated by the brokers at Aura Financial Services Inc. According to the Birmingham News, brokers at Aura Financial churned customer accounts from 2005 through April 2009. The company and its brokers allegedly pocketed one million dollars in commissions and other fees while their customers lost the value from their accounts. According to Katherine Addleman, director of the Securities and Exchange Commission's Atlanta regional office, "This is the worst example of churning I have seen in 23 years with the SEC."
What is "churning"? This is where brokers trade stocks, mutual funds, and other securities unnecessarily in order to make more commissions and fees off of the trades. There is no reason to do this but for greed. Instead of taking care of their clients, they basically "steal" their money. Why? Greed.
Both the SEC and the Alabama Securities Commission have filed claims against Aura. What does that do? Well, they will probably end up fining them, and maybe, the people who lost money will recoup some of their losses through the restitution process. But, how else can the company be punished for the actions of its brokers and their like of monitoring them? Through civil lawsuits. The threat of a civil lawsuit keeps people honest. However, there is no such threat in this situation. Why you may ask? Arbitration.
That's right. Cases involving broker misconduct go to arbitration. No jury. No Judge. No appeal. You only get arbitrators who were involved in the industry. This process is governed by the Financial Industry Regulatory Authority (FINRA).
This is why we need the Arbitration Fairness Act. This Act will help eliminate arbitration in the consumer setting. The Federal Arbitration Act was originally intended for commercial disputes; however, corporations have abused it and used it as a shield from liability and accountability in consumer transactions. Call your legislators and tell them you want this Act passed, and the next time a corporation defrauds you, your peers can decide your case, not some industry insider.