Regulators Want Data on Bond-Trade Fees, SEC, Others Scrutinize Markups Paid by Retail Bond Investors
By: Katy Burne, Aaron Kuriloff, The Wall Street Journal (Jan 2015)
In "Regulators Want Data on Bond-Trade Fees, SEC, Others Scrutinize Markups Paid by Retail Bond Investors", Katy Burne and Aaron Kuriloff report on continued efforts by regulators to improve transparency in the municipal bond market and thereby reduce the extraordinary undisclosed markups and markdowns dealers charge retail investors. The article cites SLCG's comprehensive study of municipal bond markups, "Using EMMA to Assess Municipal Bond Markups".
SEC's Cross Says Shine a Light on Tax-Free Market: Muni Credit
By: William Selway, Brian Chappatta, Bloomberg News (Oct 2014)
In the Bloomberg News article "SEC's Cross Says Shine a Light on Tax-Free Market: Muni Credit", William Selway and Brian Chappatta quote Craig McCann from SLCG's "Using EMMA to Assess Municipal Bond Markups" for the proposition that municipal bond investors pay as much as $1 billion in excessive markups and markdowns due to a lack of disclosure.
Muni Regulators May Force Brokers to Disclose Bond Trade Prices
By: William Selway, Bloomberg News (Aug 2014)
William Selway quotes Dr. McCann from SLCG's "Using EMMA to Assess Municipal Bond Markups" in the Bloomberg News article "Muni Regulators May Force Brokers to Disclose Bond Trade Prices".
Puerto Rico's travails hit muni bond firm that bet big
By: Ben Eisen, MarketWatch (Mar 2014)
Ben Eisen's "Puerto Rico's travails hit muni bond firm that bet big" of MarketWatch cites SLCG's blog post written by Craig McCann and Carmen Taveras on their work on the Oppenheimer Rochester Funds.
Study Claims Billions of Dollars of Excessive Muni Markups
By: Kyle Glazier, Bond Buyer (Jun 2013)
Kyle Glazier's "Study Claims Billions of Dollars of Excessive Muni Markups" summarizes the results of SLCG's comprehensive municipal bond markup study. We estimated that brokerage firms and underwriters charged $1 billion a year in excessive markups leading to higher borrowing costs for municipal issuers and lower returns for investors. Mr. Glazier's story led SIFMA's Michael Decker to criticize our work in a June 18, 2013 letter to the Bond Buyer editor, Fatal Flaws in Markup research paper, and Craig McCann's June 25, 2013 response, Rebuttal to Markup Report Criticisms.
The Intelligent Investor: What's Eating Your Munis?
By: Jason Zweig, The Wall Street Journal (Jun 2013)
Jason Zweig's "The Intelligent Investor: What's Eating Your Munis?" in this weekend's Wall Street Journal revisits excessive markups in the municipal bond market. His article cites SLCG's recently completed analysis of 20 million trades in long term municipal bonds between 2005 and 2013. Geng Deng and Craig McCann are the principal authors of the study. Their findings are reported in "Using Emma to Assess Municipal Bond Markups".
Citigroup Loses Muni Case
By: Randall Smith, Suzanne Barlyn, The Wall Street Journal (Apr 2011)
"Citigroup Loses Muni Case" reports on the $54.1 million FINRA award in the case of Hosier et al v Citigroup Global Markets, Inc. involving Citigroup's MAT/ASTA family of leveraged municipal bond hedge funds. SLCG's "Leveraged Municipal Bond Arbitrage: What Went Wrong?" explains the fundamental flaws in the investment strategy underlying these risky hedge funds. The award is the largest securities arbitration award to individual claimants. The next largest award involving Citigroup's hedge funds was the $6.4 million Berghorst v CGMI award from earlier this year. Craig McCann of SLCG testified on behalf of the claimants in both cases.
Crisis-Era Munis Haunt Wall Street
By: Randall Smith, The Wall Street Journal (Jul 2010)
"Crisis-Era Munis Haunt Wall Street" reports on the continued havoc caused by leveraged municipal bond arbitrage hedge funds which had been marketed to retail investors as alternatives to unlevered municipal bond portfolios. SLCG's
"Leveraged Municipal Bond Arbitrage: What Went Wrong?" explains the fundamental flaws in the investment strategy underlying these risky hedge funds.
SMUD sues Wall St. firms over alleged bid rigging
By: Jim Downing, The Sacramento Bee (Nov 2009)
"SMUD sues Wall St. firms over alleged bid rigging" quotes Craig McCann on the impact of alleged bid rigging by Wall Street firms in the municipal derivatives market.
Securities Litigation and Consulting Group, Inc. Releases Leveraged Municipal "Arbitrage" Study
By: Securities Litigation & Consulting Group (Sep 2009)
Securities Litigation and Consulting Group, Inc. ("SLCG") has issued an updated study on leveraged municipal bond hedge funds -- including Citigroup's MAT 3, MAT V and Falcon Strategies. The study reports that more than 35 similar hedge funds, including Stone & Youngberg Municipal Advantage Fund, 1861 Capital Management, Gem Capital, Rockwater Hedge Fund, LLC, and Blue River Asset Management Main Muni Fund were mis-marketed to investors as high yield, low risk alternatives to traditional municipal bond funds entitled "Leveraged Municipal Bond Arbitrage:
What Went Wrong?"
