Blog

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

Displaying 11-20 out of 83 results for "Mutual Fund".

FINRA Study: Financial Scams Prevalent

(Sep 2013)

Financial fraud is estimated to cost Americans between $40 and $50 billion annually . Last fall, the Financial Industry Regulatory Authority (FINRA) commissioned a study on the financial vulnerability of Americans to classic investor scams. The online study surveyed a sample of more than 2,000 Americans aged 40 and above, chosen to represent the approximate age, ethnicity, and census region distribution reflected by the 2010 census.¹

According to the report,the survey found that approximately...

SEC Halts Florida-Based Prime Bank Investment Scheme

(Sep 2013)

On Monday, the SEC charged a Miami-based group with perpetrating a prime bank investment fraud. The group, which includes Florida attorney Bernard H. Butts, Jr., purported financial services provider Fotios Geivelis, Jr. (a/k/a "Frank Anastasio"), several sales agents, and their allegedly fraudulent business entities (Express Commercial Capital LLC and Worldwide Funding III Limited LLC), are also subject to an emergency asset freeze. View the full complaint.

Prime bank programs promise high...

Illiquid ETFs and SEC Market Maker Incentives

(Sep 2013)

There is now nearly $1.5 trillion invested in exchange-traded products (ETPs) in some 1,400 exchange-traded funds and exchange-traded notes. However, not all of that huge sum is distributed evenly. Some funds, like SPY, have huge assets under management, while many others struggle to top $10 million. Often, issuers will close lightly-traded ETPs (leading to substantial turnover each year), but if they don't, the market price of an ETP can often deviate from the net asset value of its...

Five Broker-Dealers Ordered to Pay over $10 Million in Restitution for Non-Traded REIT Sales

(Sep 2013)

Back in May, Massachusetts securities regulators ordered five independent broker-dealers to pay over $6 million in fines and restitution for improperly selling non-traded REITs. It also settled separately with another broker-dealer, LPL Financial, for an additional $2.5 million. Just yesterday, Secretary of the Commonwealth William Galvin announced an additional settlement with the same five broker-dealers for an additional $10.75 million in additional restitution for improper sales of...

Limit Up/Limit Down Rules and the NYSE

(Aug 2013)

Nearly a year after the "flash crash" of May 6, 2010, the Securities and Exchange Commission (SEC) proposed a "limit up-limit down" mechanism that would limit the trading prices for listed equity securities to within a range near recent prices -- effectively limiting the realizable volatility of the price movements.¹ The proposal called for price bands around the average price over the preceding five-minute period and would prevent execution of trades outside of these bands. The proposal was...

Update on Inland American Non-Traded REIT

(Aug 2013)

Inland American Real Estate Trust, the largest non-traded real estate investment trust (REIT), has been the subject of intense scrutiny. In many ways, the criticism of Inland American has been representative of the issues endemic to non-traded REITs generally, such as poor dividend coverage, conflicts of interest, excessive payments to affiliates, stale or poorly updated share prices, and other issues we have discussed on this blog and in our research work . While these issues have been...

Falcone the First To Admit Guilt Under New SEC Settlement Policy

(Aug 2013)

On Monday, Philip Falcone and Harbinger Capital Partners, LLC, the hedge fund he founded in 2001, agreed to a settlement with the Securities and Exchange Commission (SEC) that in addition to an $18 million penalty included an admission of wrongdoing.¹ This is the first high-profile settlement with an admission of guilt since SEC Chairman Mary Jo White said the commission would seek more admissions of guilt rather than continue its longstanding policy of allowing defendants to 'neither admit...

SEC Charges Indiana School District and Underwriter with Defrauding Investors

(Jul 2013)

Yesterday the Securities and Exchange Commission (SEC) announced thatWest Clark Community Schools -- and Indiana School District -- City Securities Corporation and Randy G. Ruhl have been charged with defrauding investors in connection with municipal bond offerings. The SEC order against the school district and against the underwriter can be found on the SEC website.

The action stems from the fact that the school district was contractually obligated to disclose financial information on an...

Persistence Scorecard: Even Harder to Stay on Top

(Jul 2013)

S&P Dow Jones Indices has recently updated their semiannual Persistence Scorecard, which studies the consistency of returns for actively managed US equity mutual funds. Like the previous Persistence Scorecard from December 2012, the updated study finds little evidence that actively-managed mutual funds can outperform stated benchmarks on a consistent basis.

In fact, the results are rather worse than in the previous study. The report highlights three factors:

Percentage of funds in top quartile...

SEC Halts Texas-Based Forex Trading Scheme

(Jul 2013)

The SEC recently halted a foreign exchange ('forex') trading scheme run by Kevin G. White, an unregistered Plano, TX-based money manager.¹ White raised $7.1 million of investor capital through KGW Capital Management and Revelation Forex Fund representing that Revelation had achieved returns of approaching 400% since January 2009.²

Investors should realize that such persistent outsized returns are extremely unlikely. Indeed, bank and brokerage records reveal that the Revelation Forex Fund did...

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