Blog

Our experts frequently write blog posts about the findings of the research we are conducting.

Displaying 10 out of 26 results for "Muni Arb".

More Non-traded REIT Perfidy: The Roll-up Grift

(Nov 2015)

We have extensively researched non-traded REITs and concluded that these illiquid direct participation programs have cost investors $50 billion compared to more liquid investments in traded REITs. Our Fiduciary Duties and Non-traded REITs provides a good overview of the problems with non-traded REITs and a summary of our empirical results. An Empirical Analysis of Non-Traded REITs contains a more detailed explanation of our research. See our previous blog posts on individual non-traded...

Only a Faulty Auto-liquidator Pays More for An Option Than it Can Ever Be Worth

(Nov 2015)

In two previous blog posts we documented how auto-liquidators appear to have executed option trades at distorted prices to their clients' detriment on August 24, 2015. The price distortions were caused by massive sell or buy orders on thinly traded securities being dumped into the market by auto-liquidation programs. These distortions were reversed within minutes, but not before causing investors millions of dollars of unnecessary losses.

In "The Recent Market Turmoil Spells Trouble for...

UBS Puerto Rico Still Can't Shoot Straight

(Oct 2015)

We've written extensively about the investment carnage caused by UBS Puerto Rico's management and sales of closed end municipal bonds funds. A summary of our findings can be found here: UBS Puerto Rico's Bond Fund Debacle: What We Know So Far .

Others will have to decide whether UBS was just incompetent or also wolfishly indifferent to Puerto Rico investors but recent evidence demonstrates that UBS Asset Managers of Puerto Rico continues to be, at least, incompetent.

The fourteen closed end...

More Signs of Trouble for Auto Liquidators

(Oct 2015)

In "The Recent Market Turmoil Spells Trouble for Auto Liquidators Like Interactive Brokers" we wrote about how the market decline on August 24, 2015 revealed continuing problems at auto-liquidating brokerage firms that cater to active traders. These active traders' accounts typically are subject to "portfolio margin" requirements which we have written about at length. ¹

We showed that thinly traded long-dated, deep out-of-the money SPX put options were bought on August 24, 2015 at...

Enforcement Actions: Week in Review - September 21st, 2015

(Sep 2015)

SEC ENFORCEMENT ACTIONS

SEC Obtains $30 Million from Traders who Profited on Hacked News Releases
September 14, 2015 (Litigation Release No. 191)
Ukrainian-based firm Jaspen Capital Partners and their CEO Andriy Supranonok have agreed to settle charges that they profited off of hacked, nonpublic information. The SEC have charged 34 people in a scheme that allegedly hacked into newswire services and transmitted the stolen data to international traders. The traders allegedly generated over...

The Recent Market Turmoil Spells Trouble for "Auto-liquidators" like Interactive Brokers

(Aug 2015)

Interactive Brokers Group, Inc. (IB) caters to active traders including those who trade futures and options. These active traders' accounts typically are subject to "portfolio margin" requirements which we have written about at length. ¹ IB requires its customers to agree to have IB auto-liquidate positions when accounts are in a margin deficit.

IB's auto-liquidation procedures were the focus of a FINRA arbitration earlier this year in which the Claimant, Glen Lyon Long-Term Options, LP,...

Why Citigroup Paid the SEC $180 Million Over MAT/ASTA

(Aug 2015)

I. Introduction

This week Citigroup paid $180 million to the SEC to settle allegations that Citigroup improperly sold high risk hedge funds known as MAT, ASTA and Falcon. The SEC Order is available to view online.

The SEC Order makes clear that Citigroup did not effectively monitor the portfolio manager or the sales force as it sold billions of dollars of high risk MAT ASTA funds with false and misleading sales presentations. In the end, Citigroup lost hundreds of wealthy clients and likely...

Enforcement Actions: Week in Review - August 14th, 2015

(Aug 2015)

SEC ENFORCEMENT ACTIONS

Guggenheim Partners Investment Management LLC Settles Charges it Failed to Disclose Conflict to Clients
August 10, 2015 (Litigation Release No. 162)
The SEC has announced that charges against Guggenheim Partners Investment Management LLC have been settled for $20 million. The charges were over a breach of fiduciary duty in which Guggenheim failed to disclose a $50 million loan that an advisory client had given to a senior Guggenheim executive. The SEC order found...

Enforcement Actions: Week in Review - July 17th, 2015

(Jul 2015)

SEC ENFORCEMENT ACTIONS

SEC Announces Settlement With Cooperator in Grand Central Post-It Notes Insider Trading Case
July 13, 2015 (Litigation Release No. 143)
The SEC announced a settlement with Frank Tamayo for cooperating in a continuing insider trading investigation where illegal information was passed via Post-It notes at Grand Central Terminal. Tamayo was alleged to distributing received tips from a law firm clerk to a stockbroker that he would meet up with at Grand Central Terminal,...

Enforcement Actions: Week in Review - July 2nd, 2015

(Jul 2015)

SEC ENFORCEMENT ACTIONS

SEC Charges KKR With Misallocating Broken Deal Expenses
June 29, 2015 (Litigation Release No. 131)
Kohlberg Kravis Roberts & Co. (KKR) has agreed to pay nearly $30 million to settle the SEC's charges of misallocating more than $17 million in broken deal expenses. The SEC also found that KKR incurred $338 million in broken deal or diligence expenses during a six-year period ending in 2011. KKR failed to expressly disclose how fund expenses would be allocated; KKR did...

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