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

Displaying 341-350 out of 709 results

Options Strategies Embedded in Exchanged Traded Products

(May 2013)

In theory, exchange traded products (ETPs) can be linked to almost any underlying asset, including derivatives. While many ETPs are linked to portfolios of bonds or stocks, some are linked to portfolios of futures contracts, which we have discussed at length before. Bill Luby at VIX and More has written a couple posts on ETPs that are linked to portfolios of options, which are gaining some traction with investors. As usual, we greatly enjoyed Bill's posts and thought we'd explain some of the...

SEC Litigation Releases: Week in Review - May 17th, 2013

(May 2013)

Final Settlements Reached in "Golden Goose" Wall Street Insider Trading Case
May 15, 2013, (Litigation Release No. 22700)
Earlier this week final judgments were entered against Jamil Bouchareb, Daniel Corbin, and Corbin's companies, CobinInvestmentHoldings, LLC and Augustus Management LLC, for their alleged involvement in a widespread insider trading scheme. Bouchareb and Corbin have agreed to pay over $1.2 million in disgorgement and pre-judgment interest to settle the charges. Additionally,...

What Buying a House and Structuring an Asset Backed Security Have in Common

(May 2013)

When you buy a house, it's generally a good idea to get it inspected so you know if there are any expensive problems you might have to pay for after the deal closes. It's also a good idea to make sure that the person inspecting the house be independent, knowledgeable and perhaps most importantly objective -- not paid by or otherwise conflicted with the seller. Otherwise, they might overlook problems to make sure the deal goes through.

Asset backed securities (ABS) -- such as mortgage backed...

FINRA, SEC Issue Investor Alert on Pension and Structured Settlement Income Streams

(May 2013)

Last week, both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) issued investor alerts concerning pension and structured settlement income streams. The SEC's investor bulletin and FINRA's investor alert can be found online. We haven't discussed the potential problems surrounding pension or structured settlement income streams before, but these regulatory notices highlight some of the potential issues that we think are important for...

Missouri Action Against Morgan Keegan Over Municipal Bond Issue Also Illustrates Markup Abuse

(May 2013)

On April 3, 2013 Missouri's Secretary of State of the State submitted a Petition for an Order to Cease and Desist and to Show Cause against Morgan Keegan over taxable municipal bonds Morgan underwrote for the City of Moberly in July 2010. The petition and the Offering Circular for the bonds are available to view online. The story has been picked up by The Bond Buyer and Law360.

Setting aside the Petition's allegations, the trading in this set of bonds highlights markup abuse we have found is...

SEC Litigation Releases: Week in Review - May 10th, 2013

(May 2013)

SEC Charges China-based Company and Former Chief Financial Officer in Fraudulent Scheme involving Non-Existent Computing Business
May 8, 2013, (Litigation Release No. 22698)
According to the SEC's complaint, China-based company, Subaye Inc and its former CFO, James T. Crane, "misrepresented the company's business and operations, deceived the company's auditors, and misled investors about the company's true status and revenues." The SEC alleges that the defendants claimed Subaye had over 1,400...

Update on Apple-Linked Structured Products

(May 2013)

A few months ago, SLCG issued a working paper that studied the decline in value of Apple-linked structured products. Jason Zweig of the Wall Street Journal also wrote a piece about these findings, most notably that Apple's stock price decline had serious repercussions in the structured product market. Apple's stock price has continued to fall and we recently updated the paper to show how this decline is still affecting investors in structured products.*

Since reaching $700 in September of...

Variable Prepaid Forward Contracts

(May 2013)

Recently we've been working a lot with variable prepaid forwards (VPFs) in our casework and we decided to take a step back and explain these complex investments. A VPF is an over-the-counter contract between two parties involving a stock position, an upfront payment and option positions. VPFs are often used to defer taxes on appreciated stock, which has been a matter of some controversy.

Perhaps the best way to explain a complex investment is by example. Consider an investor who purchased...

New FINRA Guidelines for Non-Traded and Private REITs

(May 2013)

In recent months, FINRA has been investigating how non-traded and private real estate investment trusts (REITs) are presented to retail investors. Last week, FINRA alerted broker-dealers that they had uncovered "deficiencies" in how these investments are sold, and issued Regulatory Notice 13-18 "to provide guidance to firms on communications with the public concerning unlisted real estate investment programs, including unlisted real estate investment trusts (REITs) and unlisted direct...

SEC Litigation Releases: Week in Review - May 3rd, 2013

(May 2013)

Commission Obtains Temporary Restraining Order and Asset Freeze Against Massachusetts Man Who Defrauded Investors of At Least $5.5 Million
May 1, 2013, (Litigation Release No. 22694)
Earlier this week, the SEC obtained an asset freeze and temporary restraining order on Steven Palladino and his MA-based Viking Financial Group, Inc. in which he served as owner, president and vice president at various times. According to the SEC's complaint, Viking Financial Group raised almost $5.5 million from...

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