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Displaying 31-40 out of 62 results for "Leveraged ETF".

SEC Litigation Releases: Week in Review - June 29th, 2012

SEC Shuts Down Mortgage Fund Ponzi-like Scheme
June 28, 2012, (Litigation Release No. 22406)
According to the complaint (opens to PDF), Small Business Capital Corp. ("SB Capital") and Mark Feathers ("Feathers"), its principal, are operating an "alleged Ponzi-like scheme." $42 million have been raised by SB Capital and Feathers through selling securities issued by their mortgage investment funds, Investors Prime Fund, LLC and SBC Portfolio Fund, LLC ("Funds"). The Funds attracted more than 400...

401(k) Fees Can Drastically Reduce Nest Egg

A recent report conducted by Demos -- a New York City-based public policy organization -- points out that the high fees charged by 401(k)'s can cut nest eggs by 30% for median-income two-wage family.

Company-sponsored 401(k) plans often include a list of mutual funds in which employees can invest. Although these fees are disclosed on the individual fund prospectuses, the account statements from 401(k)'s generally do not include such fees (only the result of the fund performance net of fees)....

SLCG Research: Dual Directional Structured Products

Earlier this month, SLCG released a new research paper that values Dual Directional Structured Products (DDSPs). DDSPs are debt securities that feature payoffs very much like a long straddle position on the underlying asset for small price movements -- the investor realizes gains if the underlying asset increases or decreases in price (the origin of the term 'dual directional') within a certain range during the term of the note.

DDSPs differ from a conventional straddle position in a number...

Massachusetts Securities Regulators Fine RBC for Selling Unsuitable Leveraged and Inverse ETFs

RBC Capital Markets has agreed to pay $2.9 million in restitution to Massachusetts investors related to the sale of unsuitable leveraged, inverse, and inverse-leveraged ETFs. Secretary of the Commonwealth of Massachusetts William Galvin, who has previously investigated Bank of America over warehousing of CLO assets, issued the complaint in July 2011, accusing RBC and its registered representative Michael D. Zukowski of selling these products "to clients who did not understand what these...

FINRA Issues Sanctions on Sellers of Leveraged and Inverse ETFs

Today FINRA issued sanctions on four firms for selling leveraged and inverse exchange-traded products. The story has also been picked up by the New York Times [UPDATE: the Wall Street Journal too]. The offending firms, with links to their respective Letters of Acceptance, Waiver, and Consent ('AWC's), were:


These firms faced a total of $9.1 million in fines and restitution for sales occurring between January...

Is There No Tracking Error for ETNs?

Some investors may think that while ETFs are subject to various tracking errors, ETNs are not. The argument goes that index-tracking ETFs often hold part or the entire portfolio underlying their targeted index and are thus subject to imperfect tracking and transaction costs. ETNs, on the other hand, are debt instruments, and have returns guaranteed by their issuers.

It turns out, however, that the daily return of an ETN investment may not necessarily equal the leverage ratio times the daily...

TVIX Explodes...Then Implodes

The Wall Street Journal has an article about the rollercoaster ride that TVIX, a volatility-related ETN, has been on recently. [UPDATE 3/31/12: there is now a second WSJ article]
TVIX is a leveraged ETN issued by VelocityShares, which is Credit Suisse's ETF/ETN brand. Contrary to popular belief, TVIX and other volatility products do not track the CBOE S&P 500 Volatility Index (the VIX); instead, TVIX tracks a daily rolling portfolio of first and second month VIX futures with an average...

Junk ETFs

The Wall Street Journal ran a great piece earlier this month concerning Junk ETFs. For another recent prospective, see the recent blog postby Michael Aneiro. We have discussed exchange traded funds (ETFs) a great deal on this blog, but we haven't yet addressed the issue of Junk ETFs. A Junk ETF is an ETF that invests in high-yield bonds in an effort to garner high returns. Of course high-yield is just an industry euphemism for low-quality (or high-risk) since, generally speaking, investors...

A Primer on Investment Companies

Investment companies are entities that issue securities and whose primary business is investing in securities. We have written about investment companies in several of our posts (See blog posts on ETFS and Mutual Funds). This post provides a quick introduction to investment companies and the securities they issue. The three main types of investment companies according to federal securities regulation are: closed-end funds, unit investment trusts, and open-end funds.

Some of the main...

$85 million and Counting: What Price Will Citigroup Ultimately Pay for Its MAT/ASTA Deception?

On March 13, 2012, Bloomberg published Citigroup Ex-Manager Islam Has No Regrets After Funds Crash. Then on March 21, 2012 USA Today published Investor hedge fund claims cost Citigroup $85M and counting. These two stories deal with MAT/ASTA hedge funds Citigroup sold to retail clients which suffered staggering losses in early 2008. Both recent stories discuss the $54.1 million award in Hosier et al v Citigroup covered in the WSJ, Citigroup Loses Muni Case in April 2011.

Craig McCann has...

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