First National Realty Partners Reg D Offerings: Muppets Do Commercial Real Estate
(Dec 2022)
By Craig McCann, Susan Song, Chuan Qin, and Mike Yan.
You can read our previous posts Reg D offerings:
1) "Reg D Offerings Summary Statistics" here,
2) "$8 Trillion of Broker-Sold Reg D Offerings" here,
3) "HJ Sims Reg D Offerings: Heads Sims Wins, Tails their Investors Lose" here, and
4) "Inactive and Delinquent Reg D Issuers" here.
You can download and print or email this post by clicking here.
Introduction
In a recent note, we explained how HJ Sims executives formed 91 separate...
Inactive and Delinquent Reg D Issuers
(Nov 2022)
By Craig McCann[1], Chuan Qin[2], and Mike Yan[3].
We have been researching Reg D offerings. You can read our previous posts "Reg D Offerings Summary Statistics" here, "$8 Trillion of Broker-Sold Reg D Offerings" here and "HJ Sims Reg D Offerings: Heads Sims Wins, Tails their Investors Lose" here. You can download and print or email this post by clicking here.
I. Introduction
Regulation D issuers are not required to provide disclosures that are mandatory in registered offerings. Not only...
$8 Trillion of Broker-Sold Reg D Offerings
(Nov 2022)
By Craig McCann[1], Mike Yan[2] and Chuan Qin[3].
We previously published Reg D Offerings Summary Statistics describing the aggregate issuance totaling over $20 trillion between 2009 and July 2022. You can read that post here.
In this post we provide summary statistics for Reg D offerings sold by broker dealers. You can get a pdf copy of this post to print or email by clicking here. Next week, we will be posting information on the extremely high failure rates for Reg D offerings.
I....
Regulation D Offerings Summary Statistics
(Aug 2022)
By Craig McCann, Chuan Qin and Mike Yan.
I. Introduction
Securities issuers can either register their securities with the Securities and Exchange Commission, making extensive information about their business and the offering publicly available, or they can sell unregistered securities making almost no information available to regulators. Issuers of unregistered securities file Form D reports with the SEC on which the issuers provide cursory information and claim an exemption from...
UBS's Yield Enhancement Strategy ("YES") Returns - and then the Losses - Were Caused by Equity Market Exposure
(Oct 2019)
UBS marketed YES as market-neutral based on a combination of four options is sometimes referred to as an "Iron Condor". UBS accounts subjected to YES treatment suffered losses of 12% to 14% in December 2018 when the S&P 500 dropped 9.2% because the overlay was more than 100%.
In this paper the authors we explain the option basics necessary to understand the YES strategy and illustrate how UBS actually implemented the strategy with predictably disastrous results. They also present how UBS...
YES Strategies: Know to say no
(May 2019)
In recent years, low yields in the bond market and low volatility in the equity markets have combined to give brokerage firms the excuse to develop and sell "Yield Enhancement Strategies (YES)" to retail investors. These strategies almost always consist of selling options on the S&P 500. The sale of an option garners a premium but places the seller (the retail investor) in a short option position. Being short on a call or put option is a risky place to be. In the best-case scenario, the...
Material Misrepresentations in XIV's Prospectus Led to $700 Million in Losses
(Mar 2018)
Executive Summary
Credit Suisse's XIV Exchange Traded Note (ETN) linked to the inverse of short-term VIX futures prices lost 97% of its value or approximately $2 billion in a single day on February 5, 2018. Credit Suisse announced the following morning that it would redeem all outstanding XIV shares at the Closing Indicative Value on February 15, 2018.1
Figure 1 reports the daily closing price for XIV from its inception in November 2010 to its demise in February 2018. The run-up in 2017...
Investors "Strangled" by LJM Preservation and Growth Fund (LJMIX)
(Feb 2018)
The stock market began the month of February on a roller-coaster. During the 6 trading days from Friday, February 2nd to Friday, February 9th, the Dow Jones Industrials had intraday swings of at least 330 points each day. On four of those six days the Dow incurred 1,000 point swings.
Amidst the dramatic market swings two weeks ago, the LJM Preservation and Growth Fund stands out. The Fund plummeted over 80% (from a price of $10.34 to $1.94) in two days. See Figure 1.
Figure 1. LJM Preservation...
UBS and Santander's Role in Underwriting Employee Retirement System Bonds
(May 2017)
We've written extensively about the UBS Puerto Rico Closed End Funds. These funds were concentrated in the riskiest subset of Puerto Rico municipal bonds - uninsured bonds with little or no market outside of the proprietary UBS funds. Our prior posts on Puerto Rico can be found on our website.
In this post we revisit the Employee Retirement System's 2008 ERS Series B offering to highlight Santander's role in this ill-fated deal. The Series B bonds were the second of three ERS offerings. The...
Puerto Rico Municipal Bond Returns and Sunspots
(Apr 2017)
Introduction
Economists use a statistical procedure called regression analysis to determine whether there is a relationship between economic variables. For example, a labor economist might use regression analysis to determine whether there is a relationship between salaries and education after controlling for differences in job tenure and geographic region. An antitrust economist might use regression analysis to determine whether an attempted collusion in the airline industry effected prices...
