Blog

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

Displaying 11-20 out of 26 results for "Structured CDs".

Big Wall Street Firms Pressure Their Salesmen to Favor House-Brands

(Jul 2012)

Financial advisors and brokers are bound by ethical guidelines to analyze and recommend investment products that are suitable and appropriate for their clients' investment objectives and tolerance for risk. In general, they are obliged to put their clients' best interests ahead of their own.

The New York Times reported Monday on the recent admission from a former JPMorgan mutual fund advisor that he sold JPMorgan funds over similar offerings from outside JPMorgan for no other reason than to...

Bill Luby on VIX-Related Exchange-Traded Products

(Apr 2012)

Bill Luby, who writes at the VIX and More blog and Expiring Monthly: The Options Traders Journal, is one of the most respected voices on all things related to the CBOE S&P 500 Volatility Index, also known as the VIX. We highly recommend anyone interested in the VIX and volatility-related derivates check out his blog, which has a variety of useful analysis and commentary.

Recently there has been a lot of coverage related to TVIX and otherexchange-traded products linked to the VIX. Here at...

Abuse of Municipal Finance in Wisconsin

(Mar 2012)

The Wall Street Journal is reporting that Stifel Financial has settled with five Wisconsin school districts on charges that they misled these municipal investors with their sale of several complex CDOs. This is just another example of the situation outlined in a previous postwherein a municipality or institutional investor was taken advantage of through the sale of inappropriate investments. The settlement involves $22.5 million in cash, plus $154 million in debt forgiveness. SLCG has been...

UK Financial Regulators Probe Interest Rate Swaps

(Mar 2012)

The Financial Times reported yesterday that the Financial Services Authority -- the counterpart of the SEC in the UK -- will investigate the possible mis-selling of interest rate swaps by banks, including Barclays. The regulator decided to look into the issue after The Telegraph provided detailed information about the potential misconduct of banks when selling interest rate swaps to small businesses.

In one of its reports, the Telegraph details a situation in which a manufacturing company...

WSJ on Innovation in Commodity ETFs

(Mar 2012)

Yesterday the Wall Street Journal ran an article about recent innovation in the commodity ETF space. Our work on commodity ETFs has focused on their use of constant-maturity rolling futures strategies, which incur a roll yield depending on conditions in the futures markets. Now, according to the WSJ, many ETF issuers are choosing more complex strategies to try to mitigate these and other effects in commodities markets:

Some of these new products use complex formulas to identify commodities...

In the News: Structured CDs

(Feb 2012)

Bloomberg News reported this week that FINRA is investigating a relatively new type of product that ties the returns of certificates of deposit (CDs) to derivatives. These products are known generally as 'Structured CDs' (SCDs) but also go by 'Index-Linked CDs', 'Equity-Linked CDs' or 'Market-Linked CDs'. There have also been news stories concerning Market-Linked CDs issued by Wells-Fargo and Equity-Linked CDs issued by Goldman Sachs in recent years.

SCDs have existed since the late 1980s,...

Massachusetts Security Regulator Latest to Take Action on BoA CLOs

(Feb 2012)

The Wall Street Journal today reported that Massachusetts is investigating Bank of America for their role in the LCM VII and Bryn Mawr II CLOs. Secretary of the Commonwealth William Galvin is leading the investigation as to whether the two CLOs priced their underlying assets truthfully at the time of sales to investors. The subpoenas have also been picked up byBloomberg, Fox Business, and Reuters, amongst others.

SLCG initially reported the mispricing of these CLOs in a research paper earlier...

Could Credit Rating Agencies be Held Accountable This Time?

(Feb 2012)

A recent wall street journal article reports that U.S. lawmakers plan to introduce a bill that would require top credit-rating firms to review their credit ratings on a quarterly basis, hoping that more frequent reviews would increase the accuracy of their ratings and help identify potential problems.

According to Wall Street Journal, the bill would "amend the Securities Exchange Act of 1934 to require the chief executive officer of each [credit-rating firm] to attest, quarterly, to the...

A Wipeout That Didn't Have to Happen

(Feb 2012)

This weekend the New York Times' Gretchen Morgenson wrote an article about the recent FINRA award against Banc of America Securities for their LCM VII CLO. We have blogged about this case before, and have put together a research paper describing the underlying issue of warehousing assets in structured credit derivatives. We are very grateful to the New York Times and Gretchen Morgenson for giving this story the attention it deserves.

The fundamental problem with structured credit and many...

In the News: UBS & Morgan Stanley Subpoenaed over Reverse Convertibles

(Jul 2011)

UBS, Morgan Stanley Subpoenaed Over Reverse Convertibles

Bloomberg news reported today that the state of Georgia had sent subpoenas requesting for data and other information from UBS AG, Morgan Stanley and Ameriprise Financial Inc.. The state is investigating whether these brokerage firms violated the securities laws of Georgia in their sale of reverse convertibles to investors of Georgia.

Sales of reverse convertibles have grown, and investors who are being sold these structured...

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