FINRA Press Release: HSBC Securities
(Apr 2010)
FINRA Fines HSBC Securities (USA) $1.5 million, US Bancorp $275,000 for Auction Rate Securities Violations
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has settled charges with two additional firms relating to the sale of auction rate securities (ARS) that became illiquid when auctions froze in February 2008 - HSBC Securities (USA) and US Bancorp Investments, Inc."
The settlement is detailed in the FINRA AWC No. 20080130571...
FINRA Press Release: Morgan Keegan
(Apr 2010)
FINRA Files Complaint Against Morgan Keegan & Company for Misleading Customers Regarding Risks of Bond Funds and Advertising, Other Violations
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has filed a complaint against Morgan Keegan & Company, Inc., charging the firm with marketing and selling seven affiliated bond funds to investors using false and misleading sales materials - costing investors well over $1 billion. In addition...
SLCG Research: Mutual Fund's Term
(Apr 2010)
SLCG released today 'What Does a Mutual Fund's Term Tell Investors?'
Bond mutual funds are classified by Morningstar as ultra short, short, intermediate or long-term. Bond mutual funds have found a way to hold long-term bonds while being classified as ultra-short or short.
In this paper, we demonstrate how the losses suffered by these funds in 2008 can be explained by the increasing credit risks of holding long-term bonds. Furthermore, we find that the classification of these funds as...
FINRA Press Release: Provident Asset Management
(Mar 2010)
Dallas-based Provident Asset Management Expelled for Marketing Fraudulent Private Placements Offered by Affiliate in Massive Ponzi Scheme
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has expelled Provident Asset Management, LLC, a Dallas-based broker-dealer, for marketing a series of fraudulent private placements offered by its affiliate, Provident Royalties, LLC, in a massive Ponzi scheme."
A Ponzi scheme is a fraudulent scheme...
FINRA Fines H&R Block Financial Advisors
(Feb 2010)
FINRA Fines H&R Block Financial Advisors $200,000 for Inadequate Supervision of Reverse Convertible Notes Sales, Suspends and Fines Broker for Unsuitable Sales to Retired Couple
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that it had
[fined] H&R Block Financial Advisors, Inc., (n/k/a Ameriprise Advisor Services, Inc.) $200,000 for failing to establish adequate supervisory systems and procedures for supervising sales of [reverse convertible...
FINRA Regulatory Notice: Reverse Convertibles
(Feb 2010)
FINRA Reminds Firms of Their Sales Practice Obligations With Reverse Exchangeable Securities (Reverse Convertibles)
The Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 10-09 reminding financial firms selling reverse convertibles notes (RCN) to provide fair and balanced sales materials and communications, including proper statement on the risks associated with such notes.
In an upcoming SLCG study on RCN, we have found that investors of RCNs have been...
FINRA Investor Alert: Variable Annuities [Update]
(Sep 2009)
Variable Annuities: Beyond the Hard Sell
The Financial Industry Regulatory Authority (FINRA) published an Investor Alert to help investors decide on how to invest for retirement. An annuity makes periodic payments to the holder of the annuity. There are fixed annuities that make fixed payments and variable annuities that make variable payments.
Annuities can carry costs and risks that many investors may not be aware of because brokers who are incentivized by commission-generation do...
FINRA Investor Alert: Leveraged and Inverse ETFs
(Aug 2009)
Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors
The Financial Industry Regulatory Authority (FINRA) issued an Investor Alert to help investors understand the performance objectives of leveraged and inverse exchange-traded funds.
Exchange-Traded Funds is an investment fund that holds stocks, bonds, or commodities and typically tracks specific indices representing such asset classes. Introduced in 1993 by State Street Global Advisors, ETFs...
FINRA Investor Alert: Life Settlements
(Jul 2009)
Seniors Beware: What You Should Know About Life Settlements
The Financial Industry Regulatory Authority (FINRA) published an Investor Alert on life settlement. Life settlement is the transaction that involves selling one's life insurance policy to a third party that did not issue the policy for a lump sum payment whose value is higher than the policy's cash surrender value but less than the net death benefit.
Because life settlement is targeted at senior people, the industry can be...
