SEC Press Release: Fraudulent Bidding Practices
(May 2011)
SEC Charges UBS with Fraudulent Bidding Practices Involving Investment of Municipal Bond Proceeds
The Securities and Exchange Commission (SEC) issued a press release today announcing that it had
"charged UBS Financial Services Inc. (UBS) with fraudulently rigging at least 100 municipal bond reinvestment transactions in 36 states and generating millions of dollars in ill-gotten gains. To settle the SEC's charges, UBS has agreed to pay $47.2 million that will be returned to the...
SLCG Research: Futures-Based Commodity ETFs
(Jan 2011)
SLCG released today a new study about Futures-Based Commodity ETFs. In the past decade the price of commodities has increased substantially and many investors have wanted to diversify their portfolios by including commodities. The most common way to invest in commodities is by buying futures contracts, which requires a good understanding of the pricing of futures contract and specific features of the futures market.
In the past few years we have seen many firms offer Commodity Exchange...
FINRA Press Release: Excessive Mark-Ups
(Dec 2010)
FINRA Expels APS Financial, Bars Former President and Former Broker for Targeting an Elderly Investor with Fraudulently Excessive Mark-ups
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has expelled APS Financial Corporation, located in Austin, Texas, barred the firm's former President, George Conwill, and barred Peter Aman, a former broker at the firm, in a scheme which overcharged an elderly investor by $1.2 million."
The...
SEC Press Release: Banc of America Bid Rigging
(Dec 2010)
SEC Charges Banc of America Securities With Fraud in Connection With Improper Bidding Practices Involving Investment of Proceeds of Municipal Securities
The U.S. Securities and Exchange Commission (SEC) issued a press release today announcing that it had
charged Banc of America Securities, LLC (BAS) with securities fraud for its part in an effort to rig bids in connection with the investment of proceeds of municipal securities.
"BAS has agreed to pay over $36 million, together with...
FINRA Press Release: Disclosure of Wells Notices
(Nov 2010)
Goldman Sachs to Pay $650,000 for Failing to Disclose Wells Notices
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has fined Goldman, Sachs & Co. $650,000 for failing to disclose that two of its registered representatives, including Fabrice Tourre, had received formal notices from the Securities and Exchange Commission (SEC) that they were the subjects of investigations. Tourre's "Wells Notice" was issued in connection with the...
FINRA Regulatory Notice: Commodity Futures-Linked Securities
(Oct 2010)
Sales Practice Obligations for Commodity Futures-Linked Securities
The Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 10-51 reminding firms to make fair and balanced statements in its communication with the public on commodity futures-linked securities. They are reminded that the returns on such securities can often deviate from the returns on the underlying commodities to which they track.
In an effort to further educate public investors, SLCG has written...
In the News: Structured Notes
(Oct 2010)
Bloomberg issued a news release today reporting that the amount of sales and issuances of structured products had reached a record in 2010. The demand for higher yields and caution in investing in stock were factors which contributed to the growth in structured products. According to Bloomberg, a popular structured product was the step-up callable note, which is a callable note that increases ('steps up') its fixed rate over time.
This calls for active analysis of the merits of...
In the News: SEC Reviewing Sales of Structured Products
(Sep 2010)
Bloomberg issued a news release today announcing that sales practices of banks and broker-dealers for structured products are being investigated by the Securities and Exchange Commission (SEC) for product overcharging and disclosure of conflicts of interest.
This is not a surprising new release: it is consistent with our findings in our paper on reverse convertibles, 'What TiVo and JP Morgan teach us about Reverse Convertibles.' In this paper, we find that brokerage firms consistently...
FINRA Regulatory Notice: Municipal Securities
(Sep 2010)
FINRA Reminds Firms of Their Sales Practice and Due Diligence Obligations When Selling Municipal Securities in the Secondary Market
The Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 10-41 reminding broker dealers including municipal securities dealers to
fully understand the municipal securities they sell in order to meet their disclosure, suitability and pricing obligations under the rules of the Municipal Securities Rulemaking Board (MSRB) and federal...
