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

Displaying 251-260 out of 377 results for "Muni Markup Week".

Call Options on Hedge Funds: Double Markups and Detrimental Mispricing

(Feb 2013)

A recently settled FINRA Arbitration case was brought by an investor who was sold a $2M call option on a basket of hedge funds by a large investment bank. The case was notable for two reasons. First, the investment bank charged a 25 percent markup on the fair value of the option. This large amount was charged even though the investment bank -- call it Investment Bank 1 -- simultaneously laid off all of its risk by buying an equivalent call option from another investment bank -- call it...

SEC Litigation Releases: Week in Review -February 1st, 2013

(Feb 2013)

SEC Charges Five Former Executives of Cay Clubs Resorts and Marinas in $300 Million Real Estate Investment Fraud
January 30, 2013, (Litigation Release No. 22607)
According to the complaint (opens to PDF), Cay Clubs Resorts and Marinas' former executives, Fred Davis Clark, Jr., Cristal R. Coleman, David W. Schwarz, Barry J. Graham, and Ricky Lynn Stokes conducted "an offering fraud and Ponzi scheme that raised more than $300 million from nearly 1,400 investors nationwide." Allegedly, from 2004...

What is a CDO, Anyway?

(Jan 2013)

We've talked a lot on this blog about collateralized debt obligations (CDOs), including a post just last week about how they might be regaining popularity. We thought it might be worthwhile to step back and explain just what a CDO is and why it is considered such a risky investment.

Part of the complexity just has to do with terminology. CDOs are a type of asset-backed security; so like a derivative, the value of a CDO is linked to the value of another asset. Typically, CDOs are linked to an...

SEC Litigation Releases: Week in Review - January 25th, 2013

(Jan 2013)

Randy M. Cho Sentenced to Prison Term of 12 Years in Criminal Action
January 24, 2013, (Litigation Release No. 22601)
Randy M. Cho was sentenced in a criminal action to 12 years in federal prison on charges of "perpetrating an investment scheme between 2001 and October 2009, which resulted in almost $8 million in losses from 57 investors." In addition to the prison sentence, Cho has been ordered to pay restitution of almost $8 million. In 2009, the SEC permanently enjoined Cho from violating...

European Traders May Face Financial Transaction Tax

(Jan 2013)

Earlier this week, eleven European countries were given the green light to implement a financial transaction tax according to an article from the Associated Press (AP). The story was subsequently picked up by the Wall Street Journal (WSJ).

According to the AP, the European Commission proposed "that trades in bonds and shares be taxed at 0.1 percent and trades in derivatives at 0.01 percent." Since these taxes will be based upon notional values for derivatives, the tax could be a large...

FINRA Dispute Resolution Statistics 2012

(Jan 2013)

Last week, we covered NERA's analysis of SEC settlements during FY2012. This week, we're taking a look at FINRA's recent release of their dispute resolution summary statistics. FINRA arbitration is a common way for investors to pursue restitution for damage caused by fraud, negligence, or other fiduciary breaches. FINRA provides a detailed summary of the arbitration process and claims can be filed either online or by mail.

Through December of this year, FINRA reports that the number of new...

NERA Releases Annual Report on SEC Settlement Trends

(Jan 2013)

Last week, NERA released their annual report on trends in SEC settlements for the 2012 fiscal year. The report represents the annual update to NERA's analysis of their proprietary database of SEC litigation releases and administrative proceedings published since July 21, 2002. We've been covering these reports for about a year now and we were excited to see the results of this updated study.

According to the report, the number of settlements rose nearly 7% from FY11. While the number of...

Structured Product Issuers Under Pressure to Disclose Estimated Value

(Jan 2013)

According to securities law firm Morrison & Foerster's Structured Thoughts newsletter, the SEC may soon require issuers of structured products to disclose the estimated value of the product on the front page of the prospectus. From the newsletter:

Elaborating on the [SEC's] sweep letter, the Staff noted that issuers must disclose the "issuer estimated value" on the cover page of the offering document, and share this information with investors prior to the time of sale. This estimated value...

SEC Litigation Releases: Week in Review - January 18th, 2013

(Jan 2013)

SEC Charges Georgia Resident with Insider Trading
January 17, 2013, (Litigation Release No. 22596)
According to the complaint (opens to PDF), John M. Darden III traded with non-public information regarding the merger between Southwest Airlines Company and AirTran Holdings, Inc. Darden, who gained over $150,000 in profits from the illicit trading, agreed to a final judgment that provides permanent injunctive relief and orders him to pay over $325,000 in disgorgement, pre-judgment interest, and...

Barrier Options

(Jan 2013)

Earlier this week we introduced binary options, a type of exotic derivative that is embedded in some retail structured products such as dual directionals. Today we're going to go over barrier options, which are another exotic option contract that happens to be embedded in one of the most popular types of structured products: reverse convertibles.

Like vanilla options, barrier options have a payoff that compares the final asset price to the strike price of the option. In addition, the payoff...

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