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Displaying 10 out of 23 results for "Excessive Markups".

Diversification and UBS Puerto Rico Bond Fund Losses

(Dec 2013)

The 19 closed-end bond funds managed by UBS Puerto Rico listed in Table 1 lost $1.66 billion in the first 9 months of 2013. These funds were sold almost exclusively to citizens of Puerto Rico and approximately 70% of the portfolios of these funds were invested in Puerto Rican securities. The percentage losses over the past year range from 38% to 48% for the worst-performing UBS PR funds. These losses are substantially greater than Puerto Rican municipal bonds generally. The Standard and...

Feliz Navidad de parte de UBS Asset Managers de Puerto Rico

(Dec 2013)

Anteriormente SLCG había publicado dos entradas sobre el colapso de los fondos UBS de bonos municipales de Puerto Rico incluyendo los fondos Puerto Rico Fixed Income Funds I y VI y Puerto Rico Investors Tax-Free Funds I y VI. Nuestra entrada del 7 de Octubre de 2013 titulada Peligro en la Isla del Encanto: Inversionistas de UBS Puerto Rico Sufren Cuantiosas Pérdidas, reportamos sobre las pérdidas en los fondos cerrados de bonos municipales administrados por UBS Asset Managers de Puerto Rico...

Merry Christmas from UBS Asset Managers of Puerto Rico

(Dec 2013)

SLCG previously posted two blog entries on the collapse of UBS's Puerto Rico municipal bond funds including the Puerto Rico Fixed Income Funds I to VI and Puerto Rico Investors Tax-Free Funds I to VI. Our October 7, 2013 post, Trouble in Paradise: UBS Puerto Rico Bond Fund Investors Hit Hard, reported on losses in closed end municipal bond funds managed by UBS Asset Managers of Puerto Rico and sold by UBS brokers in Puerto Rico. Then on December 18, 2013 in our Did UBS Charge its Proprietary...

Are Managed Futures a License to Steal?

(Dec 2013)

Bloomberg's David Evans raised this question in his recent Fleeced by Fees. David found that 89% of the futures trading profits and interest on collateral in 63 SEC-registered managed futures funds from 2003 to 2012 were consumed by fees and commissions. David's story shines a light on the abusive fees charged by the managed futures partnerships. His story quotes a spokesperson for the National Futures Association self-regulatory organization / trade group as saying that "We can't just give...

Did UBS Charge its Proprietary Puerto Rico Bond Funds Excessive Markups?

(Dec 2013)

UBS Puerto Rico's closed-end funds have received much attention in recent months. While the coverage has focused on the funds' leverage and concentration in Puerto Rican municipal bonds (see for example, New York Times and Bloomberg), discovery and further research into the funds is likely to reveal other important issues -excessive markups, for instance.

Investors, including mutual funds like the UBS Puerto Rico Funds, buy municipal bonds from dealers who typically charge a markup over the...

FINRA Fines Oppenheimer over Huge Municipal Bond Markups

(Dec 2013)

FINRA announced yesterday that it has fined Oppenheimer & Co., Inc. nearly $700,000 for "charging unfair prices in municipal securities transactions and for failing to have an adequate supervisory system." FINRA found that over a 12 month period beginning in July 2008, Oppenheimer's head municipal securities trader, David Sirianni, priced bonds up to nearly 16% above the Oppenheimer's contemporaneous cost.

Oppenheimer put into place a system that would produce exception reports whenever an...

FINRA Action Against JP Turner for Unsuitable Leveraged ETF Sales

(Dec 2013)

Last Thursday, FINRA ordered JP Turner, an Atlanta-based broker-dealer, to pay restitution related to sales of leveraged and inverse exchange-traded funds (ETFs) and excessive mutual fund switching. The total restitution to 84 customers totaled over $700,000.

Leveraged and inverse ETFs are extremely complex investments, that are designed for professional traders and are generally considered unsuitable for buy-and-hold investors. One fundamental issue with leveraged and inverse ETFs is that...

SEC Litigation Releases: Week in Review (Part II) - October 4th, 2013

(Oct 2013)

SEC Obtains Asset Freeze and Other Emergency Relief in Ponzi Scheme Targeting Investors in Japan
October 3, 2013, (Litigation Release No. 22832)
The SEC was granted a temporary restraining order, asset freeze and other emergency relief againstEdwin Yoshihiro Fujinaga and his company MRI International, Inc.. Fujinaga allegedly raised more than $800 million from investors through MRI, an allegedly "fraudulent Ponzi scheme designed to misappropriate money from investors. "The defendants...

Morgan Stanley's Excessive Municipal Bond Markups

(Aug 2013)

Yesterday, FINRA fined Morgan Stanley for best execution and for charging excessive markups or markdowns. We have been covering markups extensively, and we have taken the Morgan Stanley municipal bond transactions identified by the FINRA action and applied our markup calculation methodology to calculate the distribution of markups charged by Morgan Stanley.

Let's start with an example. FINRA flagged a customer purchase of $145,000 in a West Virginia municipal bond (CUSIP: 95639RBW8) on...

Morgan Stanley Fined over Excessive Bond Markups

(Aug 2013)

Morgan Stanley has been fined by the Financial Industry Regulatory Authority (FINRA) for "failing to provide best execution in certain customer transactions involving corporate and agency bonds, and failing to provide a fair and reasonable price in certain customer transactions involving municipal bonds" according to today's news release. The story has also been picked up by the Bond Buyer and Law360, and you can find the complete acceptance, waiver and consent .

This action reflects the...

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