SLCG Research: Tenants-in-Common Interests
(Jan 2013)
While we've spent a great deal of time talking about non-traded REITs on this blog, so far we've given less attention to another kind of real estate investment that has also been sold to investors based on questionable merits: tenants-in-common (TIC) interests. TICs are private placement investments that were very popular during the real estate boom of 2002-2008, but have suffered tremendously when the markets turned sour. We discussed TICs in our paper on non-traded REITs, but we felt that...
The Basics of Options Contracts
(Jan 2013)
In a lot of our research work, we break down complex financial products into simpler pieces and then value those simple pieces one at a time. Often, those smaller components are options contracts (especially in our structured product work), which are relatively easy for practitioners to value. However, options contracts use a peculiar terminology that can be confusing to the uninitiated, so we thought we would lay out exactly what we mean when we talk about options.
Options contracts are...
SLCG Research: Dual Directional Structured Products [Update]
(Jan 2013)
We have significantly updated our working paper on dual directional structured products (or simply dual directionals). Since our first version of the paper, our work has been covered by RISK.net and in November of 2012 RISK.net named a dual directional as their trade of the month. The latest version of the paper is available from the SLCG website and SSRN.
In this version of the paper, we expanded our scope by studying all dual directionals registered with the SEC since 2008. We divide dual...
SEC Litigation Releases: Week in Review - January 4th, 2013
(Jan 2013)
SEC Charges California Company and CEO with Defrauding Investors in Nevada Gold Mining Venture
January 3, 2013, (Litigation Release No. 22585)
According to the complaint (opens to PDF), Nekekim Corporation and its CEO, Kenneth Carlton, "induced hundreds of investors to pour $16 million into a fruitless gold mining venture." From 2001 to 2011, the defendants attracted investors claiming that a physicist (who in reality "had no scientific training") helped "develop a confidential gold extraction...
