More Non-traded REIT Perfidy: The Roll-up Grift
(Nov 2015)
We have extensively researched non-traded REITs and concluded that these illiquid direct participation programs have cost investors $50 billion compared to more liquid investments in traded REITs. Our Fiduciary Duties and Non-traded REITs provides a good overview of the problems with non-traded REITs and a summary of our empirical results. An Empirical Analysis of Non-Traded REITs contains a more detailed explanation of our research. See our previous blog posts on individual non-traded...
Only a Faulty Auto-liquidator Pays More for An Option Than it Can Ever Be Worth
(Nov 2015)
In two previous blog posts we documented how auto-liquidators appear to have executed option trades at distorted prices to their clients' detriment on August 24, 2015. The price distortions were caused by massive sell or buy orders on thinly traded securities being dumped into the market by auto-liquidation programs. These distortions were reversed within minutes, but not before causing investors millions of dollars of unnecessary losses.
In "The Recent Market Turmoil Spells Trouble for...
UBS Puerto Rico Still Can't Shoot Straight
(Oct 2015)
We've written extensively about the investment carnage caused by UBS Puerto Rico's management and sales of closed end municipal bonds funds. A summary of our findings can be found here: UBS Puerto Rico's Bond Fund Debacle: What We Know So Far .
Others will have to decide whether UBS was just incompetent or also wolfishly indifferent to Puerto Rico investors but recent evidence demonstrates that UBS Asset Managers of Puerto Rico continues to be, at least, incompetent.
The fourteen closed end...
Pension Purchase Agreements; The worst "investment" in the world?
(Oct 2015)
In recent years, platforms for buying and selling pension benefit payments have been created and gained traction. Voyager Financial Group (VFG) operated one of the largest and most active exchanges for buying and selling pension payments. There is limited information available on the size of this market because these firms have operated under the radar of securities regulators.
In pension benefit agreements, a pensioner agrees to turn over a specific number of their future pension benefit...
UBS of Puerto Rico Continues to Wreak Havoc on Clients
(Aug 2015)
In October 2014, UBS Puerto Rico settled with the Office of the Commissioner of Financial Institutions for the Commonwealth of Puerto Rico ("OCFI") over UBS's lack of compliance and supervision as some brokers recommended some "mostly senior, low net worth investors with conservative investment profiles" use non-purpose loans to further concentrate their accounts in UBS PR closed-end bond funds. The UBS-OCFI settlement is available to view on our website.
As part of the settlement, UBS paid...
Why Citigroup Paid the SEC $180 Million Over MAT/ASTA
(Aug 2015)
I. Introduction
This week Citigroup paid $180 million to the SEC to settle allegations that Citigroup improperly sold high risk hedge funds known as MAT, ASTA and Falcon. The SEC Order is available to view online.
The SEC Order makes clear that Citigroup did not effectively monitor the portfolio manager or the sales force as it sold billions of dollars of high risk MAT ASTA funds with false and misleading sales presentations. In the end, Citigroup lost hundreds of wealthy clients and likely...
The Worst Investment in the World! Behringer Harvard's Priority Income Fund
(Jun 2015)
I. Introduction
What could be worse than a non-traded REIT? Well, REIT-sponsor Behringer Harvard has managed to create something even worse than a non-traded REIT: The Priority Income Fund. On May 9, 2013, Behringer Harvard and the manager of publicly traded BDCs, Prospect Capital Management, announced the initial public offering for their new joint-effort Priority Senior Secured Income Fund (PSSI) now renamed Priority Income Fund.i
The best thing that can be said of the Priority Income Fund...
UBS Puerto Rico's Bond Fund Debacle: What We Know so Far
(Feb 2015)
Over the past year, we've posted a dozen short commentaries to our blog post here. We thought it would be helpful to summarize what we know so far. This summary and our prior UBS Puerto Rico blog posts are available in Spanish. You can find all the Spanish-language blog posts by clicking here.
We discussed the national exposure of the UBS Puerto Rico losses in October 2013 in Trouble in Paradise: UBS Puerto Rico Bond Fund Investors Hit Hard. The losses only got worse thereafter. In calendar...
Lo que Sabemos hasta Ahora de la Debacle de los Fondos de Bonos UBS Puerto Rico
(Feb 2015)
Durante el último año, hemos posteado alrededor de una docena de artículos cortos en nuestro blog (aquí). Pensamos que sería útil resumir lo que sabemos hasta la fecha. Este resumen está disponible en inglés presionando "In English" en la parte superior de esta página. También tenemos las entradas anteriores relacionadas a UBS Puerto Rico en inglés. Todas estas entradas pueden ser halladas aquí.
Nuestro artículo Peligro en la Isla del Encanto: Inversionistas de UBS Puerto Rico Sufren...
UBS Puerto Rican Funds Did Not Belong in Puerto Rican Investors' Portfolios
(Feb 2015)
Over the past year, we've posted a dozen commentaries about the UBS Puerto Rican closed end bond funds to our blog.
In Taxes, Puerto Rico Municipal Bonds and the UBS Funds we show that preferential tax treatment for Puerto Rican investments cannot justify what would otherwise be unsuitable concentrations of investors' portfolios in Puerto Rico municipal bonds. We focused our attention in that post on mainland municipal bond alternatives to Puerto Rican municipal bonds and showed that even...
