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Our experts frequently write blog posts about the findings of the research we are conducting.

Displaying 11-20 out of 189 results

SEC Litigation Releases: Week in Review - December 14th, 2012

(Dec 2012)

SEC Charges Massachusetts Company, CEO and Promoters With $9 Million Securities Fraud
December 14, 2012, (Litigation Release No. 22572)
According to the complaint (opens to PDF), BioChemics, Inc., its CEO, John Masiz, and two individuals paid to solicit investors, Craig Medoff and Gregory Kroning, "made false statements to investors about collaborations with major pharmaceutical companies and the status and results of drug trials of [BioChemic's] main product." Additionally, the SEC claims...

SEC Charges Tiger Asia Executive with Insider Trading

(Dec 2012)

Earlier this week, the Securities and Exchange Commission (SEC) charged two New York-based hedge fund managers with insider trading. Sung Kook "Bill" Hwang of Tiger Asia Management and Tiger Asia Partners admitted to using material non-public information to short sell shares of Bank of China Ltd. and China Construction Bank Corp resulting in nearly $17 million in unlawfully gained profits. Tiger Asia covered its short positions with private placement shares that were obtained at a discount....

CFTC Chief Economist Finds High Frequency Trading Harms Traditional Investors

(Dec 2012)

Andrei Kirilenko, chief economist at the Commodity Futures Trading Commission (CFTC), recently released a report that purports to show that the "high-speed trading firms that have come to dominate the nation's financial markets are taking significant profits from traditional investors" according to an article posted by Global Association of Risk Professionals (GARP) as well as the New York Times.

The report categorizes HFT firms as 'aggressive', 'mixed' or 'passive' depending upon the...

Massachusetts Securities Regulators Getting Tough on Non-Traded REITs

(Dec 2012)

LPL Financial, the largest independent broker-dealer in the US, is being sued by Massachusetts securities regulators for "numerous regulatory violations in connection with the sale of non-traded REITs." We have covered non-traded REITs extensively on this blog, as well as in a detailed working paper, and it appears that many of the problems that have been identified with these products are finally attracting attention from regulators.

According to the complaint, the action is specifically...

IBM Switches to Annual 401(k) Contributions

(Dec 2012)

The Associated Press recently posted a story concerning IBM's effort to cut costs by switching from regular contributions to employees' 401(k) accounts on each paycheck to a lump-sum contribution at the end of each year. This move, clearly in the best interest of shareholders, has real and significant implications to the 401(k) accounts of IBM employees. According to the article, only a minority of companies use this type of arrangement.

About 7 percent of employers offering 401(k)s make...

Structured Products Highlight: Citigroup ELKS Linked to YAHOO!

(Dec 2012)

Today we're highlighting a structured product issued on May 25, 2011 by Citigroup. This product (CUSIP: 17317U501) is an Equity LinKed Security (ELKS) linked to Yahoo! (YHOO).

ELKS are similar to reverse exchangeables in that the notes pay periodic coupons (monthly at an annualized rate of 9.50% in this case) and protect principal on a limited basis (if YHOO's price remains above the $13.08 trigger during the term of the note). In contrast to reverse exchangeables, once a trigger event occurs...

SEC Charges Morgan Keegan Directors with Failing to Oversee Asset Valuations

(Dec 2012)

The SEC has charged eight former Morgan Keegan directors with failing to provide accurate valuations for mortgage-backed securities during the subprime crisis of 2007. We wrote a paper in 2009 explaining the collapse of the RMK bond funds and how they relate to these very same securities.

The mutual funds at issue are 1) RMK High Income Fund, Inc.; 2) RMK Multi-Sector High Income Fund, Inc.; 3) RMK Strategic Income Fund, Inc.; 4) RMK Advantage Income Fund, Inc.; and 5) Morgan Keegan Select...

Happy (We Hope) Madoff Day

(Dec 2012)

It was four years ago today that Bernie Madoff was arrested for perpetrating his estimated $65 billion fraud. Coming right on the heels of the SEC and FINRA's year-end investor warnings, Paul Sullivan at the New York Times has suggested that December 11 should be declared Madoff Day, where we reflect upon how to protect ourselves from investment fraud.

Protecting yourself against fraud, or simply bad advice, is easier said than done. The most common advice is to make sure your money is held...

SEC and FINRA Issue Investor Alert RE: Year-End Investment Considerations

(Dec 2012)

Late last week, FINRA and the SEC's Office of Investor Education and Advocacy issued an investor alert encouraging investors to take stock of their investments and finances at year-end. This alert is rather brief, but offers sound advice to prevent disputes that could lead to the kind of arbitration or litigation we see every day.

In particular, the two regulatory bodies suggest reviewing asset allocations and consider rebalancing. Conventional wisdom tells us that investing in more than one...

Deliverable Interest Rate Swap Futures

(Dec 2012)

Interest rate swaps are important tools used by many financial and non-financial firms to manage their interest rate exposure. Earlier this week, the CME Group launched a new derivative product called Deliverable Interest Rate Swap Futures with the contention that the product offers "maximum efficiency for managing interest rate exposure." This move is close in spirit to the recent move by the Eris Exchange to offer interest rate swaps on an open exchange. Both of these products are designed...

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