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.
Complex Bond Faces Regulators' Scrutiny
By: Jean Eaglesham, The Wall Street Journal (Mar 2011)
"Complex Bond Faces Regulators' Scrutiny" reports on ongoing SEC and FINRA investigations into the sales of reverse convertibles. The article quotes Craig McCann on inadequate risk disclosures and reports on some statistics from SLCG's free database of structured product analysis.
Preferred Stock: Are Those Juicy Yields Worth the Extra Risk?
By: Jason Zweig, The Wall Street Journal (Feb 2011)
Dr. Edward O'Neal discussed the risks of preferred stocks in Jason Zweig's Intelligent Investor column, "Preferred Stock: Are Those Juicy Yields Worth the Extra Risk?", for the Wall Street Journal. Dr. O'Neal notes that preferred stocks can be riskier than junk bonds, even in bull markets.
Schwab Pays in YieldPlus Settlement
By: Eleanor Laise, The Wall Street Journal (Jan 2011)
The Wall Street Journal's "Schwab Pays in YieldPlus Settlement" reports on Charles Schwab Corp.'s $119 million settlement with the SEC over its marketing of the YieldPlus fund as an ultra short bond fund despite the heavy concentration of private label mortgage back securities, it's high and misrepresented average maturity and low and misrepresented average credit quality. The SEC Complaint against the firm and the Complaint against Kim Daifotis and Randall Merk closely track the results of SLCG's independent research into YieldPlus. See YieldPlus Risk and What Does a Mutual Fund's Average Maturity Tell Investors?
Structured Notes: Not as Safe as They Seem
By: Jane J. Kim, Ben Levisohn, The Wall Street Journal (Nov 2010)
The Wall Street Journal' "Structured Notes: Not as Safe as They Seem" discusses the growth in sales of structured products in 2010. The article quotes Craig McCann on the mispricing of structured products in their offerings and mentions SLCG's free database of structured product analysis.
It's Not Nice to Mess With J.R.
By: Gretchen Morgenson, The New York Times (Oct 2010)
"It's Not Nice to Mess With J.R." reports on the $11.6 million award Larry Hagman, who played J.R. in the hit television series Dallas, won against Citigroup. Paul Meyer testified on behalf of Mr. Hagman at the arbitration hearing.
How Safe Is Your Bond Fund?
By: Jane J. Kim, The Wall Street Journal (Sep 2010)
"How Safe Is Your Bond Fund?" describes the dramatic impact of changes in how Morningstar calculates the average credit quality of bond mutual funds. Morningstar lowered the reported credit quality of more than half the bond funds it covered by at least one whole letter grade with many being reduced by two whole letter grades or more. The change in Morningstar's methodology and FINRA's prior admonishment to the industry to stop using this statistic until its glaring flaws were corrected was prompted by SLCG's study "What Does a Mutual Fund's Average Credit Quality Tell Investors?"
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.
'100% Protected' Isn't as Safe as It Sounds
By: Gretchen Morgenson, The New York Times (May 2010)
"'100% Protected' Isn't as Safe as It Sounds" cites SLCG research on the value of Lehman Brothers Principal Protected Notes sold to retail investors.
JPMorgan's 64 Percent Note Shows Risks of Reverse Convertibles
By: Zeke Faux, Bloomberg (May 2010)
Bloomberg's "JPMorgan's 64 Percent Note Shows Risks of Reverse Convertibles" cites SLCG's research into reverse convertibles and quotes Craig McCann on JP Morgan's reverse convertible linked to Tivo stock.
