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...
How Widespread and Predictable is Stock Broker Misconduct?
(Apr 2016)
In this paper we reconcile widely diverging recent estimates of broker misconduct. Qureshi and Sokobin report that 1.3% of current and past brokers are associated with awards or settlements in excess of a threshold amount. Egan, Matvos, and Seru find that 7.8% of current and former brokers have financial misconduct disclosures including customer complaints, awards, and settlements.
You can download our research paper, "How Widespread and Predictable is Stock Broker
Misconduct?".
We...
SLCG Research: Structured Product Indexes
(Nov 2013)
Most research on structured products focuses on what is known as initial date mispricing -- the difference between what a product costs and how much it is worth, as of the issue date. If you look at any of our structured product reports (let's take this reverse convertible, for example), you can see that the product was issued at a price of $1,000, but that the present value of its resulting cashflows only comes out to $960.40. The difference, $39.60 or 3.96%, represents an expected loss to...
SLCG Research: Priority Senior Secured Income Fund
(Oct 2013)
In our experience, retail investors are being sold increasingly obscure and non-conventional investments. An investment that raised our eyebrows recently is the Priority Senior Secured Income (PSSI) Fund. The PSSI Fund is the first regulated investment company that invests primarily in leveraged loans and collateralized loan obligation (CLO) tranches lower in their capital structures.
Unlike the mutual funds with which most retail investors are familiar, PSSI Fund investors are not able to...
SLCG Research: Structured Product Based Variable Annuities
(Sep 2013)
In 2010, AXA Equitable began issuing a new kind of variable annuity that, in addition to traditional mutual fund-like subaccounts, also included an option for a structured product-like crediting formula linked to an underlying index such as the S&P 500. Our firm had done a lot of work on both structured products and variable annuities, so in late 2011 we started analyzing the structured product embedded in AXA's product, eventually writing a short research paper on the subject which we...
SLCG Research: Structured Certificates of Deposit
(Jul 2013)
Lately, we've been fascinated by structured certificates of deposit (CDs), also known as 'market-linked CDs', 'equity-linked CDs', 'market contingent CDs', etc. Structured CDs are bank deposits that have interest payments linked to market indexes, individual stocks, commodities, or any other underlying asset. Unlike structured products, which have public SEC disclosure documents, structured CDs are not well studied and even the size of the market is not perfectly clear. We covered the basics...
