Oppenheimer Ordered to Repurchase $5.98 Million in Auction Rate Securities
(Jan 2012)
In January 2012, a Financial Industry Regulatory Authority arbitration panel in New York ordered Oppenheimer to repurchase certain Auction Rate Securities sold to Claimant Nicole Davi Perry for $5.98 million, plus payment of $134,108 in legal fees. The award was posted in FINRA's arbitration database this Monday. See this related report from Reuters. Dr. O'Neal at SLCG testified on behalf of the Claimant; Dr. O'Neal and Dr. McCann have authored a report on ARS previously.
Auction rate...
FINRA Regulatory Notice: Complex Products
(Jan 2012)
FINRA recently released Regulatory Notice 12-03: Heightened Supervision of Complex Products, outlining their increased scrutiny of a wide variety of alternative investments including structured products, inverse or leveraged exchange traded funds, and asset-backed securities. Here at SLCG, we've done research on each of those subjects, and have a variety of ongoing projects that bear directly on the issues highlighted by the Notice.
The products identified include:
Structured products: 2011 year-end market review
(Jan 2012)
2011 was another big year for structured product sales both in the US and abroad. According to Bloomberg's year end totals, almost $45.5 billion worth of SEC registered structured products were sold in the US in 2011, down only slightly from $49.4 billion in 2010. There were 7,293 individual products sold, up from 6,443 a year earlier.
The number of products linked to interest rates decreased, which was made up for with increases in products linked to equity assets.
Sales in Europe grew...
What are 'structured products', anyway?
(Jan 2012)
By Tim Husson, PhD
We've done a lot of work on structured products. And I mean a lot. In addition to our research on valuation and suitability issues, we've devoted a section of our website to informing investors about different types of products, as well as Tear Sheets evaluating several thousand structured products released over the past couple years. We have found that most structured products are issued at a substantial premium, and that many investors (especially retail investors) do...
SEC Press Release: Structured Products
(Jul 2011)
SEC Staff Issues Summary Report of Sweep Examination of Structured Products Sold to Retail Investors
The Securities and Exchange Commission (SEC) issued a press release today announcing that it had
"issued a report identifying common weaknesses seen in sales of structured securities products and describing measures by broker-dealers to better protect retail investors from fraud and abusive sales practices."
The report is a result of studies in the structured products business of...
FINRA Investor Alert: Asking the Right Questions
(Jul 2011)
The Grass Isn't Always Greener-Chasing Return in a Challenging Investment Environment
The Financial Industry Regulatory Authority (FINRA) published an Investor Alert to help retail investors, who are seeking for higher returns through investing in complex securities such as structured products, ask the right questions before making such investment decisions.
Investors are encouraged to read through the FINRA article. The article includes a section on 'Structured Retail Products', since...
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...
SEC Press Release: Morgan Keegan fined in connection with CDOs
(Jun 2011)
Morgan Keegan to Pay $200 Million to Settle Fraud Charges Related to Subprime Mortgage-Backed Securities
The U.S. Securities and Exchange Commission (SEC) issued a press release today announcing that
"Morgan Keegan & Company and Morgan Asset Management have agreed to pay $200 million to settle fraud charges related to subprime mortgage-backed securities. Two Morgan Keegan employees also agreed to pay penalties for their alleged misconduct, including one who is now barred from the...
Joint SEC and FINRA Press Release: Structured Products
(Jun 2011)
The SEC and FINRA Issue Joint Press Release on Structured Products
The Security and Exchange Commission (SEC) issued a press release today jointly with the Financial Industry Regulatory Authority (FINRA) dealing with structured products with "principal protection" - so called "principal protected notes." This press release announced that an investor alert had been issued to educate and warn investors about the substantial risks associated with investing in structured products.
FINRA's...
