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

Displaying 301-310 out of 707 results

Regulators Impose Record Fine for Brokerage Firm's Supervisory Failures

(Jul 2013)

Yesterday evening, the Wall Street Journal reported that FINRA and several US exchanges fined the brokerage firm Newedge USA, LLC $9.5 million over alleged failures to adequately restrict automated client trading activity that "sought to manipulate U.S. markets for nearly four years." The trading activity took place on several exchanges including NYSE Euronext, NASDAQ OMX, and BATS Global Markets according to the WSJ article. FINRA's press release can be found on the FINRA website.

Newedge...

Hedge Funds and Private Placements May Soon Solicit Retail Investors

(Jul 2013)

According to the Wall Street Journal, the SEC will soon lift the ban on soliciting shares of hedge funds and other private placement investments to the general public, "a move that's expected to unleash a wave of ads touting such investments." We've been covering this story for some time, as the SEC has seemed reluctant to implement this new rule due to concerns from Congress and others over the lack of investor protections.

However, the SEC may have no choice. Lifting the ban was required by...

Similar Structured Product Premia in US and Europe

(Jul 2013)

One point we've made again and again in our research is that structured products -- debt securities with market-contingent payoffs -- tend to be priced at a premium to face value. We have documented premia in reverse convertibles, autocallables, absolute return barrier notes, principal-protected notes, dual directionals, and over 17,000 individual products freely available in our searchable structured product database.

Recently, the SEC has required structured product issuers to disclose an...

Reuters to Stop Sneak Peek of Consumer-Confidence Data

(Jul 2013)

Thomson Reuters will no longer be offering investors an early look at the results of the University of Michigan consumer-confidence survey, the NY Times reported yesterday and the Wall Street Journal is reporting this morning. The move was prompted by an investigation by the NY Attorney General and would likely be temporary while the investigation is ongoing.

We talked about this story a bit last week, emphasizing the in depth analysis conducted by Nanex, LLC on high frequency trading data...

SEC Litigation Releases: Week in Review - July 5th, 2013

(Jul 2013)

SEC Obtains Freeze On Proceeds from Unlawful Distribution of Biozoom Securities
July 3, 2013, (Litigation Release No. 22742)
According to the complaint, eight Argentine citizens "unlawfully sold millions of shares" of Biozoom, Inc. (formerly Entertainment Art, Inc.) "in unregistered transactions" while two other Argentine citizens, Fernando Loureyro and Mariano Graciarena, also had received shares of Biozoom "but had not yet sold them." According to the SEC, from March to June 2013, the ten...

State Pension Funds Would Benefit from Passive Indexing

(Jul 2013)

The Maryland Public Policy Institute and the Maryland Tax Education Foundation released a report that uses data on state pension funds to question the value of active money management. The report finds that paying Wall Street managers to actively select and trade securities in state pension funds does not generate better investment returns, although it does provide higher fees and commissions for Wall Street managers. The results are in line with that of the S&P Indices Versus Active Funds...

VelocityShares' New Volatility ETFs

(Jul 2013)

You've heard it here before: hedging equity exposure with volatility derivatives is very tricky.

While the CBOE Volatility Index (VIX) and the S&P 500 are negatively correlated suggesting a possible hedging opportunity, you cannot invest in the VIX itself, you have to invest in derivatives (futures or options) linked to the VIX. The simple fact is that this indirect exposure to the VIX does not behave like the VIX itself, making it in the end a rather poor hedge to equities .

But issuers of...

SEC Investigating Early Release of Data to High Frequency Traders

(Jul 2013)

Every month at 10:00 AM Eastern time, Thomson Reuters publishes the Institute for Supply Management (ISM) manufacturing data on its website. The ISM data is a widely cited benchmark, and its announcement can move stock markets. On June 3, that data was disappointing, and the stock market fell in response to the news. But it fell 15 milliseconds before the data was released.

Likewise, every month at 10:00 AM Eastern the University of Michigan publishes its Consumer Sentiment Index data through...

SEC Litigation Releases: Week in Review - June 28th, 2013

(Jun 2013)

Court Enters Final Judgments Against JBI, Inc. and Former Officer in Accounting Fraud Case
June 27, 2013, (Litigation Release No. 22735)
Final judgments were entered against JBI, Inc. and John W. Bordynuik, "two defendants in a fraud action filed by the Commission in 2012." In its original complaint, the SEC alleged that JBI, Bordynuik (JBI's former CEO) and Ronald Baldwin Jr. (JBI's former CFO) engaged in a scheme that allowed JBI to state "materially false and inaccurate financial...

FINRA Fines StateTrust for Charging Unfair Prices in Fraudulent Bond Transactions

(Jun 2013)

We've been discussing markups a lot on the blog recently -- including an entire week devoted to markups in municipal bonds. Yesterday FINRA announced that it fined StateTrust Investments and their head trader, Jose Luis Turnes, for charging excessive markups and markdowns on hundreds of corporate bond transactions.¹ The letter of acceptance, waiver and consent (AWC) is available to view online.

According to FINRA, StateTrust charged prices customers much more, or paid them much less, than the...

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